micro takaful

8/8/2019 Micro Takaful

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MicroTakaful

( Islamic MicroInsurance )Presented by:

Muhammad ZubairMughal

CEO


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Contents

Introduction

Microtakaful defined

Historical perspective

MicroTakaful schemes in other countries

Prospects in Pakistan

The Takaful advantage

The way forward Conclusion


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Introduction

Micro-insurance defined:

Generally, micro-insurance is viewed just like other normal

insurance on small scale for low-income people

MicroTakaful redefined:A mechanism to provide Shariah-based protection to theblue collared, under-privileged individuals at an affordable

cost.


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Introduction Contd.

MicroTakaful can help people improve.

Microtakaful will help them sustain their financial well being.

Feeling of togetherness & security.

Opens avenues for joint efforts for mutual benefits.

Cooperative approach and outlook.

Result oriented

Society benefits at large.


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Global Landscape of Microinsurance

Only eighty million out of the world's 2.5 billion poor arecurrently covered by some form of micro insurance.

Only 3% of poor lives are insured in India and China.

Only 0.3% of the poor are insured in Africa.

In 23 of the poorest 100 countries in the world, there iscurrently no identified micro insurance activity.


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Prospects in Pakistan

Serious efforts at national level only picked up

during the last decade.

Advent of Microfinance banks. Large rural/urban divide (65% : 35%)

40% population below poverty level.

Scope for extensive work. Mushroom growth of NGOs.


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Prospects in Pakistan (Contd. ) Governments initiatives Rural support programs.

SMEDA.

Financial Support from ADB, WB, etc.

State Banks initiative 20% branches of commercial

banks required in rural areas.

Agriculture/Crop & Livestock Finance and Takaful.

Benefit of economies of scale to make these viable

ventures.


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Fire TheftRa

infall Floods

Agriculture

Property

Prices

Hospitalisation

Dental

Opti

cal

Drea

dDi

seas

eOut-patient

Health

Surgical

Disability

Dismemberment

PartialPermanent

Temporary

Total

CreditD

isability

LifeInsurance

Credit

Life

FuneralEndowments

Transition

funds

Pensions

EducationLif

e

Types of MicroTakaful Products


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Benefits of MicroTakaful


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Health

Marriage

Death

Prolonged Illness

Education of Children

Business Failure/Loss of Job

Birth of ChildrenI

mpor

tanceo

fRis

k/Eco

nomicStres

s

Potential areas of action


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Micro Takaful initiatives in

Pakistan Coverage to over 100,000 low-cost houses. Synergy with NGOs.

Micro Takaful Health Products CWCD, KKCB &

Sungi

Students Healthcare/Campus care cover

Factory workers & Daily wagers

Crop Takaful Credit coverage for Islamic Microfinance.

Covers tailored for SMEs financing.

All above at no profit basis.


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Takaful Pakistans MicroHealth

ProductsCenter for WomenCenter for Women

Cooperative Development.Cooperative Development.

(CWCD).(CWCD). No of Lives covered 14000

Beneficiaries ( Husband and Wife )

Benefits:Benefits:Hospitalization Rs. 35,000

Daily Room Limit Rs. 500

Maternity Rs. 5,000 (Sub limit)Rate er famil Rs. 570


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Takaful Pakistans MicroHealth

ProductsMinistry of Zakat & Ushar

No of Lives covered 100,000,0

Beneficiaries (Husband, Wife and 3 Children's)Benefits:Benefits:Hospitalization Rs. 150,000

Individual Limit Rs. 25,000Daily Room Limit Rs. 500

Maternity Rs. 5,000 (Sub limit)

Rate per family Rs. 695/-


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Basic Elements of Takaful Mutuality and cooperation.

Takaful contract pertains to Tabarruat as against muawadatin case of conventional insurance.

Payments made with the intention of Tabarru (contribution)

Eliminates the elements of Gharrar, Maisir and Riba. Wakalah/Modarabah basis of operations.

Joint Guarantee / Indemnity amongst participants sharedresponsibility.

Constitution of separate Participants Takaful Fund. Constitution of Shariah Supervisory Board.

Investments as per Shariah.


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InvestmentIncome

OperationalCost of Takaful

/ ReTakaful

Claims &Reserves Surplus

(Balance)

P A R T I C I P A N T S T A K A F U L F U N D(P.T.F.)

MudaribsShare of PTFs

InvestmentIncome

WakalahFee

Investment

Income

ManagementExpense of

theCompany

Profit/Loss

S H A R E H O L D E R S F U N D (S.H.F.)

Participant

WAQF

TakafulOperator

ShareHolder

Investment bythe Company

The Takaful Advantage


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Participants

Pool of Contributions

Participants Contribution


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Participants



Investment in

Shariah ComplaintAvenues

Profit from Investment(Part of the profit goes to the

Company for acting as

mudarib)


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Participants



Wakala Fee Claims Re-Takaful Expense etc.

Investment in

Shariah Complaint Securities

Profit from Investment

(Part of the profit goes to the

Company for acting as mudarib)


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Participants




Investment in






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Participants



Wakala fee, Claims, Re-Takaful Expenses

SURPLUS

Investment in






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Participants




SURPLUS

Investment in






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Participants



SURPLUS

Contingency Reserve Charit Distribute Amon Partici ants


Investment inShariah Complaint Securities





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Participants



Contingency Reserve Charity Distribute Among Participants

SURPLUS







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Participants




SURPLUS







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Participants



SURPLUS



Investment in





+ +

-

=


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Comparing Takaful to Conventional InsuranceIssueIssue Conventional InsuranceConventional Insurance TakafulTakaful

Organization PrincipleOrganization Principle Profit for shareholdersProfit for shareholders Mutual for participantsMutual for participants

BasisBasis Risk TransferRisk Transfer Co-operative risk sharingCo-operative risk sharing

Value PropositionValue Proposition Profits maximizationProfits maximization Affordability and spiritualAffordability and spiritual

satisfactionsatisfaction

LawsLaws Secular/RegulationsSecular/Regulations Sharia plus regulationsSharia plus regulations

OwnershipOwnership ShareholdersShareholders ParticipantsParticipants

Management statusManagement status Company ManagementCompany Management OperatorOperator

Form of ContractForm of Contract Contract of SaleContract of Sale Cooperative,Cooperative,

Islamic contracts of Wakala orIslamic contracts of Wakala or

Mudarbah with TabarruMudarbah with Tabarru

(contributions)(contributions)

InvestmentsInvestments Interest basedInterest based Sharia compliant, Riba-freeSharia compliant, Riba-free

SurplusSurplus Shareholders accountShareholders account Participants accountParticipants account


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Takaful through Time Origins in the First Constitution of Madina.

The first Takaful company was set up in Sudan in 1979, almostsimultaneously followed by another one set up in Bahrain.

There are now around 179 Takaful companies in over 40 countries.

Poor Insurance rate in the Muslim countries (


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What is required?

When there is a will, there is way!


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End of presentation

Jazzakallah khair !

[email protected]
mailto:[email protected]:[email protected]

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