Pak-Qatar Family Takaful

Moonis Ahmed is Daily Times’ Business Reporter

“Creating awareness was really a daunting task. People do not have awareness about insurance and Takaful is also new, so we had to spend a lot of our time creating awareness in the market”
Pak-Qatar Family Takaful Limited is a progressive and technology-driven Shari'ah-compliant company providing Takaful solutions in Pakistan. It was incorporated in 2006 and began operations in 2007. The company is registered with, and supervised by, the Securities and Exchange Commission of Pakistan (SECP). An independent Shari'ah Advisory Board chaired by Mufti Muhammad Taqi Usmani certifies all products and operations for Shari'ah compliance. The company is rated A minus (Stable Outlook) by JCR-VIS Credit Rating Co. Ltd. The company is supported by Qatar Islamic Insurance Company (QIIC), Qatar International Islamic Bank (QIIB), Qatar Islamic Bank (QIB), Qatar National Bank (QNB), the Amwal Group, Masraf Al-Rayan and Munich-based FWU AG. The paid-up capital of Pak-Qatar Family is Rs. 533 million. The company has re-Takaful arrangements with Munich-Re, Hannover Re and Takaful-Re. It has strategic BancaTakaful alliance with FWU AG.
Daily Times' reporter Moonis Ahmad recently met with Pervaiz Ahmed, the chief executive officer of Pak Qatar Family Takaful and discussed the company's performance, insurance sector and a few things about his personality. A pioneer of the family Takaful concept in Pakistan, P Ahmed played an active policymaking role in the committee formed by the Securities and Exchange Commission of Pakistan to review the 2005 Takaful Rules.
Moonis Ahmad: Please tell us about your education.
Pervaiz Ahmed: I completed my MBA with majors in Finance and Marketing. I am also a Fellow of Life Management Institute, USA. With my exposure to Takaful, I developed interest in the field of Islamic financial and economic system. To quench this thirst, I completed a one-year post-graduate diploma from the Center of Islamic Economics (CIE), Darul Uloom Karachi. I have also attended several other courses and workshops on management and personal development worldwide.
MA: Where did you work before joining Pak Qatar Takaful?
PA: I started my career with State Life Insurance Corporation (SLIC) of Pakistan in 1989, and rose to the rank of Deputy Manager before I switched to American Life Insurance Company Limited (ALICO) in 1995. Thereafter, I joined Commercial Union Life Assurance Company Limited (later merged into New Jubilee Insurance Company Limited) as Head of Sales and Marketing and developed alternative distribution channels, including Bancassurance. Prior to establishing Pak-Qatar Family Takaful Limited, I also worked for a management training and consultancy firm in the Middle East and Pakistan, as their Chief Operating Officer.
MA: Did you have to work aggressively to create demand for your products? Or was it already there because of aversion to conventional insurance in the country?
PA: Creating awareness was really a daunting task. Insurance penetration is very low in Pakistan; people do not have awareness about insurance and Takaful is also new, so we had to spend a lot of our time creating awareness in the market. Apart from hiring and training our own people, we launched a number of campaigns in educational institutions, in communities and chambers of commerce and came up with some publications to boost awareness of Takaful.
MA: How is the competition that you face from the conventional insurance sector?
PA: There is a lot of competition! There are already many players operating in the conventional corporate sector and they are giving us really a tough competition. They do not want new players to survive in the market and they don't want Takaful to survive.
But as far as the individual sector is concerned, where we are selling our individual products, we don't see much competition, market penetration is fairly low and there is room for new players. If you are not going to target existing customers of insurance companies, the market is wide open. We are not facing that much competition in the personal sector but in corporate. We are working on penetrating the corporate market on the basis of service quality, product features and price.
MA: Why did you decide to join this profession?
PA: Insurance has always been a dynamic industry. My brother introduced me to insurance. Helping people and helping Pakistan to grow has always remained part of my vision. I believe that it is in this industry that we can increase our savings and effectively invest them for our future needs. This not only helps breadwinners to effectively manage their money but also serve as a boost for an economy.
MA: How has your company progressed so far?
PA: We have seen remarkable growth in a short span of three years. We introduced some of the best available technology acquired from Malaysia to this industry. We have a sales force of more than one thousand trained consultants. We have opened 25 branches spread over 14 cities. In terms of business volume we have set industry records. Gross contribution towards individual family business increased from 75. 314 million rupees in 2008 to 332.813 million rupees in 2009.
MA: What business model are you following?
PA: We follow Wakala-Waqf model. We have created a waqf fund for the benefit of masses, the membership of which is opened through a payment of nominal donation (tabarru'). In an event of death or disability of the member, the waqf fund shares the burden by providing financial help to the bereaved family. Our role in this process is of a manager (wakeel).
MA: What innovative products are you offering or planning to offer?
PA: We have a range of products including individual, group and banca products catering to needs of customers that have different situations. One such product is Share n Care, which is a feature laden takaful plan for breadwinners who want to save for their future financial needs such as children's higher education and marriage.
MA: What type of human resource do you have?
PA: Our human resource includes a judicious mix of young and experienced professionals. We are proud of our team, as we have some of the leading industry experts. We have also taken onboard fresh graduates of top business schools and religious institutions. This gives us an edge in providing Shariah-compliant takaful solutions and services. As part of our mission, we constantly empower our employees by inspiring and guiding them.
MA: What is your comment about current state of the takaful industry in Pakistan?
PA: The insurance industry contributes 0.3 percent to the GDP whereas Takaful is even smaller. The overall Takaful size was around Rs 1.4-1.5 billion in the last year. Considering the rapid growth during the last two years, the company is aiming to achieve Rs 1.8 billion in 2010. Though the target is ambitious but we hope to achieve it considering outstanding performance in 2008 and 2009. There are five takaful operators currently doing business in Pakistan. Two of them are family (life) and three of them are general takaful operators. Takaful was introduced to Pakistan in 2005 after takaful rules were introduced by the SECP. There is a huge market available and people have responded positively to products and services.
MA: Where do you see the industry five years down the road?
PA: I can see many more Takaful operators joining the industry. There is a huge market in Pakistan, as the penetration is very low. With increasing public awareness, I am expecting exponential growth in consumer base. Pak-Qatar will play its role in this growth. We plan to penetrate into rural areas within next five years.
MA: Where do you like to spend vacations?
PA: I generally spend my time in personal development through reading during my vacations. I attend workshops and courses to continue my learning process. *