3rd International Conference and

Exhibition on Islamic Banking and Takaful

2009
2nd Nov 2009

Challenges & Issues

Faced by Takaful Industry

Presented by:
Imtiaz Bhatti
MD / CEO
Pak Kuwait Takaful Company Limited

Agenda
Introduction
Challenges
Issues

/ Background

Introduction / Background

Global Takaful Market

Ernst and Young's World Takaful Report 2009 notes that

global Takaful contributions have risen to $3.4bn in 2007 as
compared to $2.5bn in 2006 (36% Growth)

In 2005, the projections for 2015 were US$ 7.7 Billion. The
2009 new projections for 2012 for Takaful Market are US$
7.7 billion and US$ 11.0 billion by 2015
Source- Gulf News

Projections an estimated amount of annual contribution by 2012

will be
S. No.

Global Market

Market Projection

GCC

US$2 billion

Asia Pacific

US$3.1 billion

Europe, Turkey, China, and

the USA

US$2.6 billion

Source- Islamic finance news

Pakistan Takaful Industry Landscape

Takaful industry in Pakistan is new and relatively small with less than 1% market
share, there is potential for it to be developed further even with the entry of new
players

Takaful Landscape

The regulatory framework for

Takaful was established in 2005
under the Takaful Rules 2005
Five Takaful Operators
presently operate in Pakistan
General Takaful : 3
Family Takaful : 2

Total Takaful premiums of the

market remain very low, less
than 1% of the total insurance
market ,PKR 600m (USD 7.5
Million)
All Takaful companies in Pakistan
have foreign promoters

Takaful
Company
Pak-Kuwait
Takaful Company
Ltd

Takaful Pakistan
Ltd

Pak-Qatar
General Takaful
Ltd

Start of
Operation

Etiqa, Malaysia
2005

Noor Financial, Kuwait

Amana Takaful, Sri Lanka

2007

2007

Emirates Global Islamic

Bank, UAE
Emirates Investment
Group, UAE
Qatar Islamic Insurance
Co, Qatar
Qatar Islamic Bank, Qatar

Pak-Qatar Family
Takaful Ltd

2007

Dawood Family
Takaful Ltd

2008

Source: Insurance Association of Pakistan, Company Annual Reports

Foreign
Shareholders

Qatar Islamic Insurance

Co, Qatar
Qatar Islamic Bank, Qatar

Gulf Capital, Dubai

5

Challenges

Challenges
Awareness

It is required from All Islamic

Financial Market Players to establish Islamic
Finance Awareness as a Cause with
dedication & commitment.

Re-Takaful

Capacity Takaful entry to

bigger & complex Risk is highly dependant on
Re-Takaful Operators capacity which is very
limited compared to Conventional Re-insurers

Skilled

Human Resource Takaful

Industrys rapid growth is not backed by
required technically skilled Human Resource

Challenges
Product

Development New and

innovative products meeting participants
requirement need to be developed

Investment

Options Investment options

in accordance with Shariah principals are
limited

Regulatory

Framework The
establishment of International standards for
Takaful would allow consistency in regulation
across jurisdictions

Issues

Issues
Lack

of uniformity in Shariah Decisions

Efforts are required to establish National Shariah

Board
Comparison

of Takaful with Conventional

Insurance Companies on various matters
(Rates, Service, Commission etc.)

Issues
Strong

back-office support services such

as
Strong & Prudent Risk Management
Market Intelligence and Market Research
Rapid Product Development
Integrated Information Technology
Efficient Management Accountancy
Proactive Brand Management & Communication
Strong Human Resource Development

Thank You