HAS THE TIME FOR PAK-QATAR TAKAFUL COME?

FARHAN NOOR
(feedback@pgeconomist.com)
Mar 22 - 28, 2010

Victor Hugo once said that "there is nothing more powerful than an idea whose time has come". Pundits of the Takaful industry claim that the time for Takaful has now definitely arrived, especially in Pakistan.

It all started as an experiment in 1979, in Sudan, and in UAE, before Malaysia took it up in 1984 and popularized it in the world. From there, given the parallel global rise in Islamic Banking, Takaful started establishing itself as an industry.

It was in 2005 when the Securities and Exchange Commission of Pakistan promulgated the Takaful Rules and paved the way for dedicated Takaful companies to make headway. Till now, a total of five Takaful Operators have established businesses which include two for Family (Life) operations and three for General operations.

Pak-Qatar Takaful Group is the only Takaful Group in Pakistan having both independent Family (Life) and General Takaful set ups.

It is believed that the gross Premium of our local life insurance industry will reach to Rs. 100 billion respectively by 2012. This represents a very big pie for Takaful to bite into.

Besides, globally, we have found Takaful to be even more enterprising in its approach. Internet statistics say that Takaful comprise 0.7% of the global insurance market and that it is growing at a rate of 15% to 20% per annum.

A total of 138 dedicated Operators and near about 40 window operations are providing Takaful services worldwide. The industry is primarily rooted in South and East Asia, followed by Middle East, Africa, Europe and in other pockets of Muslim presence. These are impressive statistics by all means.

There is immense business scope for Takaful in Pakistan. Figures like Muslim population growth complemented by dependency ratio in Pakistan, etc makes a very sound feasibility report.

Two key countries Kuwait and Qatar have invested in this potential of which the most notable companies are Pak-Qatar Family & General Takaful Limited.

Pak-Qatar Takaful, the leading Family Takaful and General Takaful companies in Pakistan, is backed by some of the strongest financial institutions from the State of Qatar and Munich-based FWU AG. The combined paid-up capital is a strong Rs. 840 million respectively.

Financially supported by some of the strongest institutions from the State of Qatar (combined together assets under management amounts to US$26.12bn as at 31 Dec, 2007), and further strengthened by global Re-Takaful arrangements, Pak-Qatar Family Takaful has the institutional capacity and the technical competence to meet and excel client's needs and expectations. The companyís state-of-the-art technology is complimented with highly committed and specialized human resources in addition to a strategic BancaTakaful alliance with Munich-based FWU AG ensuring impeccable client-service.

The company is registered and supervised by the SECP and an independent Shari'ah Supervisory Board chaired by Mufti Muhammad Taqi Usmani oversees products and business processes for Shari'ah compliance. Pak-Qatar Family is rated A minus (having a Stable Outlook) by JCR-VIS Credit Co. Ltd.

The company is the fastest growing Takaful Company in Pakistan and as well as in the region. Its branch network has rapidly grown to 24 which is spread in 14 cities.

Pak-Qatar Family and General Takaful, combined, offers a complete product portfolio of Takaful. The companies are well-positioned to ensure impeccable client service following heavy investments in state-of-the-art business technology and in SAP ERP solutions.

Takaful is an essential financial need which one cannot and should not do without, especially if one is a breadwinner in the family.

There are just too many factors that can go wrong: the possibility of a premature death (God Forbid), a life-altering disability, or loss of any material possession like a house or a car through fire or theft is a risk all too real to be ignored or left unaddressed.

These risks involve significant financial losses that can potentially leave entire families destitute and businesses insolvent in a single blow. Whereas, insurance has been the modern way of mitigating these risks through a process of risk transference from policyholder to the Insurer in exchange of premiums, it is not without Shari'ah reservations or Ethical concerns.

The Shari'ah does not have anything against the concept of insurance per se i.e. provisioning against risks, but the way it is implemented. Takaful is that alternate to conventional insurance which is regarded both as Halal and as ethical.

Simply put, Takaful is Arabic word which means "mutual solidarity". The system is based on the golden principles of brotherhood and cooperation in which participants pool their small amounts of savings in a common fund called the Waqf Fund.

This way as more and more people become members of this Fund, the Fund grows bigger and stronger. If, God Forbid, any defined risk happens to any member, money from this Fund will be used to compensate for that financial loss. Here is a scenario to understand this concept better.

Say, Abdur Rehman, a 35 year old, happily-married, is a sole breadwinner of a family of four and decides to become a member of the Takaful Waqf Fund for a period of 25 years. By saving Rs. 5000 a month, he can ensure that in case, God Forbid, he passes away, his beneficiary will receive minimum Rs. 1.5 million which is specific to his Plan. This money will help the family to remain financially independent and maintain their current lifestyle with dignity.

If, God Willing, he does not pass away, and the Plan period matures, he will receive a handsome amount from the Takaful Operator in the form of Halal investment profits which can be used to provide for his children's higher education fees and marriage, buying a new house, financing his Hajj, or as retirement income.

Takaful, therefore, is both a financial protection tool and also offers long-term Halal and profitable investment opportunity through the concept of savings.

Takaful is categorized into Life and General; Life or Family Takaful caters to all the risks associated with the life of a person such as premature death, illness, or disability whereas General Takaful caters to risk involving assets, like car theft etc.

It is important for a breadwinner to understand the benefits of Takaful and develop the habit of savings. For further learn about Takaful, visit www.pakqatar.com.pk

Farhan Noor, Marketing & Communications Department, Pak-Qatar Family & General Takaful. He may be reached at marketing@pakqatar.com.pk

P. AHMED,

CEO PAK-QATAR FAMILY TAKAFUL LIMITED

P. Ahmed is currently the Director of Pak-Qatar Takaful Group and the founding CEO of Pak-Qatar Family Takaful Limited, the fastest growing Takaful Company in the region.

Ahmed has over 21 years of leadership experience in the life insurance/Takaful Management, Operations, Claims, Sales & Marketing roles. He is a member of various technical and operational committees and is consulted by Securities & Exchange Commission of Pakistan (S.E.C.P) for the review of the regulatory framework for Takaful/Insurance in Pakistan.

He is also engaged in the development of Shari'ah guidelines and policies for Takaful investments, Operations, and Audits. Ahmed pioneered Bancassurance and alternate distribution channels in Pakistan.

Prior to establishing Pak-Qatar Family Takaful, he was associated with a management training and consultancy firm in Middle East and Pakistan as Chief Operating Officer and Organizational Development Consultant.

Ahmed is the also the founding Director of Guidance Institute which is an Islamic Finance training wing established by the Hikmah Foundation. Furthermore he is serving as Director of Al-Meezan Investment Management Ltd.

A dynamic personality and an engaging speaker, Ahmed is spearheading the cause of Takaful in Pakistan through electronic media appearances, radio, and print interviews. Has special interest in Islamic Finance and teaches Risk Management & Takaful at post graduate level.

He may be contacted at: p.ahmed@pakqatar.com.pk

ROHAIL ALIKHAN

DEPUTY CEO, PAK QATAR GENERAL TAKAFUL LIMITED

Rohail Alikhan has over 15 years of senior management experience in diverse service industries with special focus on Islamic Finance. A graduate of University of Toronto, Canada, Rohail has done International Post Graduate Diplomas in Islamic Banking and Finance, and Islamic Insurance (Takaful), with an in-depth knowledge of Shariah and other Islamic disciplines.

Before joining PQGTL, he has served few leading Insurance and Takaful companies, including Adamjee Insurance, Pak-Kuwait Takaful Company Ltd & Takaful Pakistan Ltd. He has also worked for various other local and international companies.

He may be contacted at: rohail.alikhan@pakqatar.com.pk

Syed Adnan Hasan

Group Head of Marketing at Pak-Qatar Family & General Takaful,

Syed Adnan Hasan is one of those who are always exploring new worlds of imagination, creating ingenious plans to meet the challenges head-on and then dedicating all his energies to materialize these projects.

Syed Adnan Hasan has also been instrumental in promoting an environment of unity, fraternity and intimacy within his organization. His respect for ethical values and high level of professional expertise has led him to success in every venture of his life. With its highly commendable values of trust, confidence, devotion, dedication and hard work, Takaful emerged as a star of the Islamic Insurance Industry and very soon became a leading light of the field of Islamic Insurance in Pakistan.

According to Syed Adnan Hasan, the progress that Takaful has made in a short span of time reflects the professional quality of the institution and the honest effort and dedication, which the employees put into it.

The Takaful family has played a key role in this success by its drive, motivation and solidarity. Tall, elegant and impressive speaker Syed Adnan Hasan started his career in 1999 from Manahattan Leo Burnett after having spent a few years in Cyprus and USA, completing his education. Manhattan was his learning ground. However, he quit Manhattan as the Account Manager to launch his own company by the name of PopShop Media, where he established contacts with international retail marketing (POP & POS) solution providers and pioneers in introducing 3D Graphics, Interactive Media and Holografx in Pakistan, in which he still involved but on freelance projects only. In 2007 he joined Helium as the Senior Account Manager which really took him; by his knowledge & experience in all different direction. Strategy base marketing is the need of the hour to stand out from clutter.

He may be contacted at: adnan.hasan@pakqatar.com.pk