Thanks to our Respected Sir Hammad Ahsan

Topic:

Group Members:

Mubashar Maqbool 32

Shazma Rauf 14

Waseem Baig 48

Muhammad Shan 44

Umair Aamir 36

Qadir Abbas 39

Waqas Akram 37

Dawood Family Takaful (LTD)

Table of content Foundations of Takaful in Pakistan Takaful Worldwide What DFTL is? Risk and Insurance Three Islamic Scholars approved by SECP Takaful Products Basic Elements of Takaful Mitigating Misconceptions about Takaful Differences between Takaful and Insurance Takaful Models Takaful Accounting Re-Takaful (Reinsurance) Dawood Takaful Products SWOT Analysis Recommendations

Foundations of Takaful in Pakistan• 1949 - Declaration made in the Objectives Resolution adopted by the Constituent

Assembly of Pakistan “Sovereign state of Pakistan is established to enable Muslims individually and collectively to order their lives in accordance with the injunctions of the Holy Qur’an and Sunnah”.

• 1973 - The Constitution of Pakistan declares Pakistan as “Islamic Republic of Pakistan and Islam as the official religion of the state”.

• 1985 - Objectives Resolution was made ‘substantive’ part of the constitution.• 1983 to 1989 - The Council of Islamic Ideology held its sessions in order to

survey the Islamic Insurance System.

• 1992 - The Council of Islamic Ideology submitted its report on Islamic Insurance System.

• 2000 - The Insurance Ordinance defines the term “Takaful” in Section 2 and provides for establishment of Takaful companies in the country.

• Sept., 2005 - Takaful Rules notified

Takaful Worldwide The first ever Takaful company was established in 1979 - the Islamic Insurance

Company of Sudan.

124 Takaful Companies in over 23 countries.

Global Market Size– 2004: US$ 1.4 billion– 2014: US$ 9.72 billion

Average growth rate (20.08 % for 2014 ) higher than conventional insurance

companies.

Non – Muslims increasingly opting for Takaful products for commercial benefits.

What DFTL is?1.  Dawood Family Takaful Limited, a subsidiary part of First Dawood Group.

2. First Dawood Group already in the various businesses in Pakistan, with the name of

First Dawood Investment Bank, Dawood Mudarbah Bank, Dawlance Pakistan, Burj

Islamic Bank, Dawood Group of Companies, Nagina Group of Companies, Sarena

Group of Companies, Yamaha Motorcycle and many other sectors of Businesses in

Pakistan.

3. Other than Takaful Company, First Dawood Group are mainly do business in the

sectors, which includes Islamic Banking, Cotton Spinning, Textile, Garments,

Electronics, Motor Vehicles, Chemicals and many other sectors.

4. The first Company of Dawood family started in the year 1917, with the name of

Dawood Cotton Factory in Gujrat, India before partition.

5. An authentic group which are in businesses since last more than 9 decades in Sub

Continents.

Meaning of Takaful

• Takaful comes from the Arabic root-word….

• So it means mutual protection and joint guarantee.

Takaful Insurance

Mission

 “To create solidarity, peace of mind and security by sharing risks for mutual protection of assets and

property against damage or loss within the framework of Shariah”

Risk and Insurance

Risk and uncertainty are fundamental facts of life.

All human activities are subject to risk, which may lead to financial or

physical losses to him.

An arrangement by which a company or the state undertakes to

provide a guarantee of compensation for specified loss, damage, illness,

or death in return for payment of a specified premium.

Methods of Handling the Risk Insurance Perspective

1. Risk Transfer

2. Risk Sharing

Takaful – Regulatory Framework

• Takaful Act – 1984 of Malaysia.

• Saudi Arabian Monetary Agency (SAMA) Regulations of Saudi Arabia - 2004 .

• Bahrain Monetary Authority (BMA) Rules – 2005.

• Takaful Rules – 2005 of Pakistan.

3 Islamic Scholars approved by SECP1. Mufti Muneburahman

2. Syed Zaid Seraj

3. Syed Sabir Shah

Annual 1.5% annual operation fee charged from customer profit

In 2013 growth rate was 18%

In 2014 growth rate was 20.08%

52 branch

50 small locations

Maximum investment for 40 years

Minimum investment for 10 years

Takaful Products• General TakafulOffers all kinds of non-life risk coverage's products like motor takaful, marine takaful, fire takaful, home takaful, shop takaful, etc.

• Family TakafulOffers life coverage and it has significant success in SE Asia. Malaysia 73% net contributions and cut throat competition among market players in SE Asia.

• Banca-TakafulOffers tailored coverage for banks

Basic Elements of TakafulRisk Sharing:

Risk is shared between participants and not bought or sold between them and the

Operator

Nature of Contract:

3 party contract involving Takaful Operator, Company, and the Participant No direct

relationship of Participant with Takaful Operator.

Investment Management:

All investments are done based on Shari’ah guidelines

Shari’ah Compliant:

Takaful is accepted by Shari’ah Scholars as a Halal risk mitigation tool

• Constitution of separate “Participants’ Takaful Fund”.

• Constitution of “Shariah Advisory Board.

How Islamic Principles Works

Differences between Takaful and InsuranceIssue Insurance Takaful

Organization Principle

Profit for shareholders Mutual for participants

Basis Risk Transfer Co-operative risk sharing

Value Proposition Profits maximization Welfare and spiritual satisfaction

Laws Secular regulations Shariah regulations

Ownership Shareholders Participants

Management status Company Management Operator

Form of Contract Contract of Sale Wakala or Mudarbah

Investments Interest based Interest-free

Surplus Shareholders’ account Participants’ account

Mitigating Misconceptions about Takaful

Takaful Models

1) Mudaraba Model:

1. It is an equity Partnership.

2. The Profit Sharing Model.

3. The sharing of such profit (surplus) may be in a ratio 5:5 , 6:4

etc. as mutually agreed between the contracting parties.

4. This is commonly used in Malaysia.

2) Wakala Model

1. It is an agency Model.

2. Cooperative risk sharing occurs among participants where a takaful

operator earns a fee for services (as a Wakeel or Agent) and does not

participate or a share in any underwriting (Profit) results as these

belong to participants as surplus or deficit.

3. Under the Wakala model the operator may also charge a fund

management fee and performance incentive fee.

4. This model is used in Middle East region. 

Takaful Accounting Two separate accounts are created:

1. Participants’ Takaful Fund. 2. Shareholders’ Fund.

Separate Accounts are created for: 1. Operational activities. 2. Investment activities.

Dual audit of all transactions:1. Financial Auditors.2. Shariah Auditors. (criteria: Accounting & Auditing

Organization of Islamic Financial Institutions, AAOIFI). 

Re-Takaful (Reinsurance) Currently few ReTakaful companies worldwide offering a relatively small

capacity: – Sudan (1979) National Reinsurance.

– Sudan (1983) Sheikhan Takaful Company.

– Bahamas (1983) Saudi Islamic Takaful and ReTakaful Company.

– Bahrain/Saudi Arabia (1985) Islamic Insurance and Reinsurance Company.

– Tunisia (1985) B.E.S.T. Re

– Malaysia (1997) ASEAN ReTakaful International. More than

– Dubai (2005) TakafulRe by ARIG. 18

– Lloyds of London to form a ReTakaful Syndicate. Retakafuls

– SwissRe to form a separate ReTakaful Pool Worldwide

– MunichRe to form a separate ReTakaful Pool

Dawood Takaful Products

Sukoon

Salamti

Samar

Sahulat

Salary saving plan

Single contribution

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Plan your retirement days with Sukoon, a plan that gives you the

benefits of financial protection to address your future requirements and

fulfills your desire to grow savings in accordance with Shariah

principles.

Sukoon has a unique competitive edge in terms of contribution paying

term for a period of 10 or 15 years and get the coverage till maturity at

the age of 60 or 65.

Sukoon provides endowment benefit at retirement, or in case of earlier

Death pays such benefits to your dependants.

1.SUKOON

2. SALAMTI Change is the essence of Life. Some changes make your life colorful but

sometimes a change can be quite challenging.

Now you can prepare yourself for change by participating in our Salamti

Takaful plan which provides you with both Financial protection & savings

growth in accordance with Shariah.

You can choose any term of payment from 10 to 30 years up to maximum

maturity age of 65 years. Salamti gives you peace of mind because your

beloved ones are secured financially for the future.

Samar is a unique Shariah Compliant plan which accumulates funds

for your child’s Education / Marriage and at the same time provides

your family the protection in case of an unforeseen event.

It has 3 inbuilt features of Family Income benefit, Plan continuation

benefit & Accidental death benefit.

3. SAMAR

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An excellent combination of Takaful Protection and Investment Return to

ensure a secure future for you and your family’s various needs.

Our Sahulat Plan is designed to help you plan your future financial needs.

Sahulat is a Shariah compliant investment and financial protection vehicle

which can secure your future financial well being.

4. SAHULAT

(A SHARIAH ARRANGMENT TO PROVIDE)

You may decide your regular Contributions subject to minimum amount.

These will be used to purchase investment Units in our managed

SHARIA funds of your choice; Balanced Fund, or Income Fund.

You will have access to your funds including any profits which can be

redeemed either through partial withdrawal, surrender, in the event of

claim, or survival at maturity.

The fund value may fluctuate based on underlying performance and not

guaranteed.

5. SALARY SAVING

6. SINGLE CONTRIBUTION SINGLE CONTRIBUTION (Investment Linked Takaful Plan)

You may decide your minimum contributions subject to minimum

amount.

These will be used to purchase Investment Unit in Our SHARIAH

managed funds of your choice ; Income Fund , Balanced Fund or

Aggressive Fund.

The fund value may fluctuate based upon underlying asset

performance. ear

FIB will give 50000 wazifa to age of sixteen year and FIB will give

100000 for marriage women.

PRODUCT FEATURES Surplus is Distributed to participants.

Enhance availability of savings at age 60,65,70 & 75 years.

Participants can withdraw money from their investment account (PIA) at any time before maturity after payment of 3rd year of contribution.

Pay for a period of 10 ,15,or 20 years and get takaful coverage till maturity.

Choose your own risk-return combination based on your circumstances.

Annual, semi-annual, quarterly or monthly payment period. Enhance your financial protection by choosing covers:

e.g. Accidental death and disablement, critical illness, family protection, family income and funeral expense etc.

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Growth in the number of customers

– 2013 5700 customers in the current year

– 2014 6000 customers in the current yearTotal no of customer in all over the Pakistan is 35000

• Re-takaful from the Dubai based company

• For before maturity death claims

• NPL is different from to branch but the branch manager do

not know how many NPL

• Due to the government restriction Dawood takaful invest 20

% in the government institutions and 80% in their own

institutions.

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Strength

Its investment sector are own

Dawlance, Dawood Burj, Dawood textile-mills , Engro foods,

Numl university, China electricity (Husain Dawood)

Takaful is an Islamic state.

Shariah board certificate fatwa

No mark up in return

When a person died in Lahore and its insurance from Dawood

takaful in Multan its family can receive cash from the branch

takaful in Lahore.

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Weakness

Jubilee made in 1994

Dawood takaful family made in 2008

Time tenure is the Dawood family

takaful is weakness

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Opportunity Client

The client is understanding the concept of haram and hilal.

Growth rate high

No mark up in return

You can pay your money in installment

No bound to pay payment in full.

WORKS EMPLOYEES Flexible target

Growth target

City branches

Salaries

Bonuses

Threats

NO threats

If competitor company people who spread

rumours in the market about takaful concept that is

threat for company.

Recommendation

• There is also a problem of work overload for the

employees and it should be control properly so that the

employees are motivated.

• IT draw backs should be improved.

• Advertising only on Pakistan TV and Radio Pakistan

but now it should properly advertise and

Communicate to public about the products provided

by it, so that more customers will be attracted.