The sponsor of Pak-Qatar Takaful has planned an investment of around Rs500 million in Pakistan for expanding its family Takaful business and other related projects, said P. Ahmed, Chief Executive Officer, Pak-Qatar Family Takaful Limited talking to local news paper.“Considering potential growth in Takaful business the board of directors of the company decided to make investment during the current year,” he said. The company would invest further Rs500 million in family Takaful and other related projects for expansion, Ahmed said.Pak-Qatar initiated the Takaful - sharai compliant insurance - in Pakistan with the help of leading Qatar bank in 2005. The company operates in both general and family Takaful.During the last financial year the family Takaful business of the company has registered tremendous growth. The contribution of the company reached to Rs466.64 million during the last financial year from Rs129.68 million in 2008.
“The clients have entrusted the Sharia compliant insurance system that resulted in exponential growth,” the CEO said. “The robust growth in contribution provided opportunity for expansion,” Ahmed said.
The family Takaful was incorporated in 2006 and started operation in 2007 with the paid up capital of Rs533 million. In the very first year the company received overwhelming response amid global recession and economic deterioration at the domestic front.To a question on the impact on Takaful business of global recession and domestic economic deterioration, the CEO said that the insurance on Sharia principles was in initial phases. “The insecurity in conventional insurance system attracted the people to adopt Takaful,” he said.He said that the global recession was due to financial crisis but in Pakistan it has its own reasons attributed to energy crisis etc. As the contribution for family Takaful increased the number of claims also rose significantly in 2009. “The claims are integral part of insurance business. Though the claims went up the ratio against the contribution has declined during the year,” he said and adding the ratio would further decline in upcoming years because the family Takaful is in its initial phases.Surplus, which is an inherent benefit of Takaful, is calculated as the remaining amount in Waqf Fund after paying off all claims and meeting all expenses for the year. The company will share 15 per cent of the surplus amount with the Individual Takaful participants. “The advantage of surplus makes the Takaful different from conventional insurance system. The Pak-Qatar Takaful is the first company to declare the surplus,” the CEO said.About the insurance business share in Pakistan comparing with GDP growth, he lamented that the insurance industry shares 0.3 per cent to the GDP whereas Takaful is even less. The overall Takaful size is around Rs1.4-1.5 billion in the last year, in which the Pak-Qatar has major share.Considering the rapid growth during the last two years, the company is aiming to achieve Rs1.8 billion in 2010. “Though the target is ambitious but we hope to achieve it considering outstanding performance in years 2008 and 2009,” he said.About launching the new products, the CEO informed that the customers would have access to an assortment of Individual and Corporate Takaful Plans. For the corporate sector group, the company will soon launch pension plan. For the individual, the company is launching debt protection and critical illness plans. Further, he also said that micro Takaful is also part of plans to reach different segments of the market.Ahmed stressed the need of human resource for the industry. “The growth of Takaful business requires skilled human resource and in this regard government should initiate introductory courses at intermediate levels,” he added.About the Bancassurance and Takaful line of business, he said that the company believes in joint ventures. He said that big financial institutions such as Dubai Islamic Bank, Standard Chartered, Emirates Global Islamic Bank are already on board and distributing Takaful products through bank counters. Other banks such as Bank Islami, MCB Bank and Bank Alfalah will shortly commence their Takaful operations for the benefit of the people.
An idea of allowing a window to conventional insurance companies for Takaful, the CEO rejected it and said that the two different mode of insurance cannot be operational together.
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