Takaful is growing 35 percent faster than conventional insurance worldwide with over 133 Takaful operators and $4.3 billion market size, which is expected to surge by $8 billion by 2012, senior officials said on Tuesday.
Addressing members of Banking and Insurance Sub-Committee of the Karachi Chamber of Commerce and Industry (KCCI), P Ahmed, Chief Executive Officer Pak-Qatar Family Takaful, said that Takaful is a Halal and ethical alternative to conventional insurance, which is based on the concept of brotherhood and mutual solidarity.
He said that Takaful is a transparent community-pooling system in which participants contributes their savings into the common fund to help those who need it most in times of financial difficulty.
“For this to happen, Takaful operator creates the Waqf Fund or the Taburru Fund where participants contribute their premiums or contributions on the basis of Taburru into Waqf Fund and claims are paid by the Waqf Fund,” he said.
Ahmed said that there is a potential for Takaful in Pakistan as only around 0.6 percent of the GDP goes towards insurance, whereas in India that figure hovers around 3.5 percent.
“Pakistan is ranked third in the list of 11 most developed or developing economies around the world in terms of low national savings,” he said. National Savings, as percentage of the GDP, declined from 20.8 percent in FY03 to 14.3 percent in FY09, he added.
Following the introduction of Takaful Rules by the Securities and Exchange Commission of Pakistan (SECP) in 2005, five Takaful operators have entered the local insurance market, including three in General and two on the Family side. These numbers are likely to increase in the coming years, which would bring in the much-needed vitality in the insurance industry, he added.
Source : thenews.com.pk