RETAKAFUL

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MicroTakaful the way forward
Presented by Capt. M. Jamil Akhtar Khan

ACII, MCIT, Master Mariner Chief Executive
Officer TAKAFUL PAKISTAN LIMITED
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Contents

• Introduction
• Microtakaful defined
• Historical perspective
• MicroTakaful schemes in other countries
• Prospects in Pakistan
• Incremental values The Takaful advantage
• Takaful Pakistans initiative
• The way forward
• Conclusion

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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.
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Introduction Contd.

• Microfinance can help people improve.
• Microtakaful will help them sustain their
  financial wellbeing.
• Feeling of togetherness security.
• Opens avenues for joint efforts for mutual
  benefits.
• Cooperative approach and outlook.
• Result migration of individual level.
• Society benefits at large.

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Historical Perspective

• Takaful concept evolved from individual common
  interest.
• Industrial era of early 1900s
• Microfinancing hand in hand with Microinsurance
  and later
• Microtakaful.
• Bancassurance/Bancatakaful

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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.

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Types of MicroTakaful Products
Property
Floods
Fire
Rainfall
Theft
Health
Agriculture
Prices
Surgical
Disability
Out-patient
Hospitalisation
Permanent
Total
Partial
Optical
Temporary
Dread Disease
Dismemberment
Credit Disability
Life Insurance
Dental
Pensions
Transition funds
Credit Life
Funeral
Endowments
Education Life
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Prospects in Pakistan

• Serious efforts at national level only picked up
• during the last decade.
• Advent of Microfinance banks.
• Large rural/urban divide (65 35)
• 40 population below poverty level.
• Scope for extensive work.
• Mushroom growth of NGOs.

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Prospects in Pakistan (Contd. )

• Governments initiatives Rural support
  programs.
• SMEDA.
• Financial Support from ADB, WB, etc.
• State Banks initiative 20 branches of
  commercial
• banks required in rural areas.
• Agriculture/Crop Livestock Finance and
  Takaful.
• Benefit of economies of scale to make these
  viable
• ventures.

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Potential areas of action
Construction of a House
Marriage
Death
Prolonged Illness
Importance of Risk/Economic Stress
Education of Children
Business Failure/Loss of Job
Birth of Children
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Takaful Pakistans initiatives

• Coverage to over 100,000 low-cost houses.
• Synergy with NGOs.
• Students Healthcare/Campus care cover
• Factory workers Daily wagers
• Crop Takaful
• Credit coverage for Islamic Microfinance.
• Covers tailored for SMEs financing.
• All above at no profit basis.

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The way forward

• Tax incentives
• Goodwill
• Awareness
• Extensive documentation
• Distribution channels
• Strategic alliances
• Incentives Awards

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The way forward
?????
NO
THEN
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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 fromThe Demand for
Micro insurance in PakistanbyELIZABETH
MCGUINNESS AND VOLODYMYR TOUNYTSKY MARCH 2006
The Takaful Advantage
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The Takaful Advantage
Share Holder
S H A R E H O L D E R S F U N D (S.H.F.)
Mudaribs Share of PTFs Investment Income
Wakalah Fee
Investment Income
Management Expense of the Company
Profit/Loss
Takaful Operator
Investment by the Company
WAQF
Claims Reserves
Surplus (Balance)
Investment Income
Operational Cost of Takaful / ReTakaful
Participant
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.)
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The Paradigm shift
ALONG WITH
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Urban Subsidy Rural
Surplus
Subsidy for Takaful Contribution
Surplus
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Current scenario
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What is required?
When there is a will, there is way!
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End of presentation Jazzakallah khair
! captain.jamil_at_takaful.com.pk