Capt. M. Jamil Akhtar Khan ACII, MCIT, Master Mariner

Chief Executive Officer

Email: captain.jamil@takaful.com.pk

TAKAFUL PAKISTAN LIMITED

Partnering with people

Introduction toTakaful

&MicroTakaful

Contents

• Introduction

• Benefits of MicroTakaful

• The Takaful advantage

• Global Landscape

• Takaful Products

• Prospects in Pakistan

• Initiatives by Takaful Pakistan

Introduction

• The word ‘Takaful’ has been derived from the Arabic root word ‘ Kafala’ meaning ‘mutual guarantee’.

• It is risk-sharing instead of risk-transfer.

• Takaful is a practical manifestation of the Quranic injunction for mutual co-operation and assistance for the common good/benefit.

• It encompasses the predominant elements of social good, brotherhood and solidarity – founded on the core Shariah principles.

• By doing so, one gets benefited – from cradle to grave and even in the Hereafter!

Introduction

Micro-insurance defined:“Risk-pooling products that are designed to be appropriate for

the low-income market in relation to cost, terms, coverage, and delivery mechanisms”.

MicroTakaful refined:“A mechanism to provide Shariah-based protection to the blue

collared, under-privileged individuals at an affordable cost”.

Benefits of MicroTakaful

The Takaful Advantage

InvestmentIncome

Operational Cost of Takaful

/ ReTakaful

Claims &Reserves Surplus

(Balance)

P A R T I C I P A N T S’ T A K A F U L F U N D (P.T.F.)

Mudarib’s Share of PTF’s

Investment Income

Wakalah Fee

InvestmentIncome

Management Expense of

the Company

Profit/Loss

S H A R E H O L D E R S’ F U N D (S.H.F.)

Participant

WAQF

Takaful Operator

Share Holder

Investment by the Company

The Takaful Advantage

“ … they seemed satisfied with the convenience and affordability of the policy, but some thought that the premium should be reimbursed if they do not file a claim”.

Excerpt from

The Demand for Micro insurance in Pakistan

by

ELIZABETH MCGUINNESS AND VOLODYMYR TOUNYTSKY MARCH 2006

Global Landscape

• Only eighty million out of the world's 2.5 billion poor are

currently covered by some form of micro insurance.

• Only 3% of poor lives are insured in India and China.

• Only 0.3% of the poor are insured in Africa.

• In 23 of the poorest 100 countries in the world, there is

currently no identified micro insurance activity.

International Product Offerings

Delta Life Insurance Company, Bangladesh

Vimo SEWA, India

People’s Insurance Company, China

MicroTakaful Products

Most Complex

Least Complex

Takaful prospects in Pakistan

• 97% Muslim population.

• Demand for insurance increasing with increase in per capita income.

• Personal lines insurance business (leasing, health,

medicare) growing at a higher rate than the other conventional classes.

• Islamic banking on sound footing with support of the government.

• MicroTakaful.

Takaful Pakistan’s Initiatives

• Coverage to over 100,000 low-cost houses.

• Synergy with NGOs.• Students’ Healthcare/Campus Care Cover• Factory workers’ & Daily wagers • Crop & Livestock Takaful• Credit coverage for Islamic Microfinance.• Covers tailored for SMEs financing.• All above at ‘no profit basis’

Conclusion

• Takaful defined

• Benefits & Advantage

• International scenario

• Takaful Products

• Prospects in Pakistan

• Takaful Pakistan’s Initiatives

Thankyou

captain.jamil@takaful.com.pk