issues in takaful by pervaiz ahmed
TRANSCRIPT
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Issues in TakafulSECP Takaful Conference
Pervaiz Ahmed CEO Pak-Qatar Family TakafulMar. 14th, 2007 Sheraton, Karachi.
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Takaful A
product
and
an
ideology
HumanResourceAwarenessMarketing/Distribution
Operationsand
Underwriting
ClaimsInvestments
Conclusion
Agenda
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Takaful- A product and an Ideology
Takaful
is
not
only
a
tool
to
mitigate
loss
or
to
make
halalprofits.Itisanideologywhichpromotes
Solidarityandjointguarantee
Selfrelianceandselfsustainabilityforcommunity
wellbeing
Assistancetothosethatneedit
Communitypoolingsystem
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Takaful- A product and an IdeologyTounderstandtheoperationalissues,itiscriticalto
understand
the
basic
difference
between
conventionalinsuranceandTakaful
RiskSharingVs.RiskTransfer
WakeelVs.Guarantor
AmeenVs.
Owner
TheconceptofWaqfbringsthefundamentalchangeinthenatureofinsurancebusinessandthecontractualrelationshipbetweeninsuredandthe
insurer.
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UnavailabilityoftrainedandcommittedHR
ANationwide
issue
Financialsector,especiallyIslamicinstitutions,arefacingthisissuewithgreaterseverity
Insurancehasnotbeenthecareeroffirstchoice.
Takafulcould
attract
insurance
practitioners
who
considerconventionalinsuranceasUnIslamic.Thesearesizableinnumber.
TraininganddevelopmentLack
of
training
culture
in
the
industry
Lackofqualitytrainingresources
HR Issues
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AwarenessTakafulisanewconceptsbothforthegeneralpublic
and
the
UlemaAwarenessamongstGeneralPublicLowliteracyrateMisconceptionsabouttraditionalinsurance
Lowinsurance
penetration
AwarenessinUlemaThereisaneedtopublicize/publishthe
proceedingsofIjma whichtookplaceinDarul
UloomKarachi
to
declare
Takaful
as
ashariah
compliantriskmitigatingtool.
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Marketing/Distribution
Bestpracticesisanissueforconventionalinsurersas
well.Relyingonexistingsalesforcecouldcausedamageto
theconcept.
Takafuloperatorsshouldfollowbestpracticeswithgreater
rigor
and
commitment.
DevelopingadistributionchannelwhichcouldconveytheessenceofTakafulandexploitthemarket
opportunitiesis
an
uphill
task.
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Marketing/DistributionTakafulshouldnotonlybemarketedtopeoplewho
do
not
buy
conventional
insurance
for
religious
reasonsorbuyincaseofdireneeds.Itshouldbepromotedasthetooloffirstchoiceforriskmitigating.
Alternate
distribution
channels
should
be
utilized
e.g.Bankatakaful.
ThroughTakaful,overallinsurancepenetrationcouldbeincreasedinthecountryandahuge
untapped
market
could
be
tappedPositiveresponsefromthemarket.Peoplearekeentoknow.
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Initial set-up and underwritingInitialsetup unavailabilityof
Shariahcompliant,
efficient
and
cost
effective
businesssystem
Timetestedprocesses.
UnderwritingandPricing
Takafuloperator
should
be
prudent
and
equitable
Wakalafeeandotheradmincharges
Fulldisclosure
Nohidden
charges
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Claims settlement
Claimsshould
be
settled
with
Speed
and
accuracy
Issueofexgratiaclaims
Legalissuesincaseofnonpaymentofclaims
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Investments
Limitedinvestment
opportunities
Uncertaintyregardingapplicationoflimitsoninvestmentsimposedbyregulators.
ItissuggestedtoissueseparateinvestmentguidelinesforTakafulcompanies.
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ConclusionTherearechallengesbuttheopportunitiesarefarmorethanthechallenges.TodojusticetotheTakafulconceptahigherlevelofcommitmentanddedicationisrequiredfromallstakeholders.
Takafuloperators
should
not
exist
to
make
profit.
Rathertheyshouldmakeprofittoexistandtheyshouldexistforthegreaterpurposewhichwouldbethewellbeingoffellowhumanswhentheyarein
need.
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Jazak-Allah khair
www.pakqatar.com.pk (launching soon!)