Home / Interviews / Takaful method set to take over 70pc of Pakistan insurance industry in five years
Takaful method set to take over 70pc of Pakistan insurance industry in five years

Takaful method set to take over 70pc of Pakistan insurance industry in five years

More awareness, taking digital form and conducive environment are key to success
Interview with Muhammad Nasir Ali Syed – CEO, Pak-Qatar General Takaful Limited

PAGE: Tell me something about yourself and your organization, please?

Muhammad Nasir Ali Syed: There is no bigger satisfaction in the world than to help fellow human beings and get their honest blessings in return. My colleagues call me that I am more so a teacher and a mentor. I strongly believe in developing a vision in life and plan accordingly. Without vision and purpose, you cannot achieve your goals. My parents have been a great source of motivation and I try my level best to follow their professional approach and positive traits.

As far as our company is concerned, Pak-Qatar Takaful Group is Pakistan’s pioneer and the largest Takaful group with over a decade of operational excellence and 100+ branches all over the country. I am proud to be a part of Takaful industry. Takaful is a Shariah compliant alternative to conventional insurance.

In the current age, the need and importance of insurance cannot be overlooked, but the current principles and practices used in insurance are against the teachings of our religion. Islamic scholars have deliberated over this matter for years and devised the concept of Takaful. It will not be possible for me to summarize that effort of years within few lines, but briefly we can say that the three elements which are forbidden in any Sales-Purchase agreement namely Riba (interest), Qimar/Maysir (gambling) and Gharrar (uncertainty) are avoided in Takaful (Tabbaru Agreement) by creating a model on the principles of Tabarru (charity) and Waqf (similar to mortmain).

PAGE: Could you tell us about the progress and the challenges being faced by the insurance sector in Pakistan?

Muhammad Nasir Ali Syed: There are many challenges being faced by the Insurance/Takaful sector in Pakistan. Foremost, amongst all, is the awareness about it. People are not much educated and they are even least bothered until and unless any unforeseen event occurs or it becomes their necessity. Secondly, there is shortage of competent workforce. Very few people are fully trained as major colleges/universities are not offering courses on Takaful. Thirdly, regulatory environment needs to be more conducive and advancement of technology is need of the hour. Apart from these challenges, the Takaful operators need to introduce innovative products as per customer needs and offer quality service as well.

 

PAGE: How did the insurance sector perform last year and what could be expected by the end of this year?

Muhammad Nasir Ali Syed: Despite recent political and economic crisis, the insurance/Takaful industry did perform well but not what it could have been. As masses are becoming aware of Takaful, I am optimistic that our growth will accelerate in the upcoming years. This year will also be a bit slow due to the global economic crisis and the recent coronavirus outbreak. I can foresee that within the next five years, the Takaful business will take over 70 percent of the total insurance industry in Pakistan. The global growth of Takaful business is nearly 28 percent per annum, while the growth of insurance is only 8 to 10 percent.

In the 210 million population of Pakistan, the Insurance-Penetration in the country has only reached 0.8 percent, over so many years. So till date, the remaining 99.2% of the financial protection market is still untapped, giving us a vast room to grow. Pak-Qatar Takaful already has over 4% market share in Pakistan.

PAGE: Could you tell us about the skilled work force of the insurance sector of Pakistan?

Muhammad Nasir Ali Syed: Unfortunately, the skilled workforce is very less. The main reason is that many colleges/universities are not offering course on Takaful and the talent is not emerging unlike MBAs with majors in Marketing, Finance and HR. I often come across same people whenever I visit workshops, seminars. We need to produce more graduates (Islamic Finance) as I believe Islamic Finance industry has a lot of growth potential in the years to come.

PAGE: What must be done for the promotion of the insurance sector? 

Muhammad Nasir Ali Syed: Awareness is the key to success and I firmly believe that digital medium will help a lot for the promotion of this industry. Conducting regular seminars, workshops and appearance in media will also increase its reach throughout Pakistan. Research has indicated that people are now more inclined towards Islamic products. The educational institutions in Pakistan have started offering university courses and diplomas in Islamic finance which is a very positive development. This will provide the industry with professionally trained personnel. The real task is to build an image of Takaful as a modern-day protection system that promises financial security while adhering to the high moral values and the non-exploitative, humanitarian principles of Islam.

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