Takaful by adnan


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Takaful by adnan

  1. 2. <ul><li>“ NEED OF A TAKAFUL COMPANY IN AFGHANISTAN” </li></ul><ul><li>A PRESENTATION BY </li></ul><ul><li>ADNAN MALIK </li></ul><ul><li>ACII (UK), FLMI (USA),MBA (PAK) </li></ul><ul><li>Senior Manager </li></ul><ul><li>TAKAFUL PAKISTAN LIMITED </li></ul>
  2. 3. Afghanistan needs a Takaful company for: <ul><li>Supporting the reconstruction process </li></ul><ul><li>The Stability of economy </li></ul><ul><li>Helping a common man when something goes wrong </li></ul><ul><li>The growth of financial sector </li></ul>
  3. 4. <ul><li>These benefits can be achieved with an insurance company, then why we are talking about a “TAKAFUL COMPANY” </li></ul><ul><li>BECAUSE </li></ul><ul><li>A 2009 UN estimate shows that the Afghan human population is 28,000,000 with nearly 99% muslim majority. </li></ul><ul><li>Consensus stands developed among contemporary Islamic scholars that Takaful is a Shariah compliant alternative to conventional insurance. </li></ul>
  4. 5. Meaning of Takaful <ul><li>Takaful comes from the Arabic root-word ‘kafala’ ------- guarantee. </li></ul><ul><li>Takaful” is the Shariah Compliant brand name for the Islamic alternative to conventional insurance . </li></ul><ul><li>Operationally, Takaful refers to participants mutually contributing to a common fund with the purpose of having mutual indemnity in the case of peril or loss. </li></ul>
  5. 6. Continues….. <ul><li>This perspective is upheld by numerous meetings and resolutions including the following: </li></ul><ul><li>The Islamic conference, Makkah, 1976. </li></ul><ul><li>Resolution by Council of Saudi Ulama in 1977. </li></ul><ul><li>In 1985,Fiqh Council of the Organization of Islamic Conference declared conventional insurance Haraam and recommending Takaful as the Shariah compliant alternative. </li></ul>
  6. 7. Supporting Reconstruction Process: <ul><li>Life, health and disability coverages for deminers </li></ul><ul><li>In building contracts of roads, bridges, buildings, takaful company can provide guarantees to contract awarding entity if the contractor fails to fulfill his contract. </li></ul><ul><li>Once a building is built, takaful company can provide compensation if any defined loss occurs </li></ul>
  7. 8. Stability of Economy: <ul><li>If any nation wants its economy moving in upward direction, it has to add risk mitigation tools in the economy. </li></ul><ul><li>Exports $2.128 billion (2009) </li></ul><ul><li>Imports $8.550 billion (2009) </li></ul><ul><li>GDP $13 billion (2009 est.) </li></ul><ul><li>GDP per capita $457 (2009 est.) </li></ul>
  8. 9. Continues…. <ul><li>GDP by sector </li></ul><ul><li>agriculture : 31% industry : 26% services : 43% (2008) </li></ul><ul><li>According to the World Bank, &quot;economic growth has been strong and has generated better livelihoods&quot; since 2001 </li></ul><ul><li>Farmers need crop coverages against drought, floods, pest attacks and fire etc. </li></ul><ul><li>Industrialists needs coverages for their industries. </li></ul>
  9. 10. Helping a common man when something goes wrong: <ul><li>Takaful helps people in following situations by way of paying claims: </li></ul><ul><li>When a general takaful company pays claim cheque to the factory owner whose factory has been destroyed due to fire. </li></ul><ul><li>When a general takaful company pays claim to a person whose only car got stolen. </li></ul><ul><li>When a life takaful company pays death claim cheque to a widow on the death of her husband. </li></ul><ul><li>When a health takaful company pays claim to a person undergone heart by pass surgery. </li></ul>
  10. 11. <ul><li>Continues… </li></ul><ul><li>Afghanistan has the highest infant mortality rate in the world – 257 deaths per 1,000 live births – and 70 percent of the population lacks access to clean water </li></ul><ul><li>Every half hour, an average of one Afghan woman dies from pregnancy -related complications. </li></ul><ul><li>According to Reuters , &quot;Afghanistan's healthcare system is widely believed to be one of the country's success stories since reconstruction began. </li></ul><ul><li>Health takaful coverages for the people can be another tool for further improvement. </li></ul>
  11. 12. The growth of financial sector in Afghanistan: <ul><li>Number of operating banks = 18 </li></ul><ul><li>Number banks offering Islamic banking = 05 </li></ul><ul><li>Number of microfinance institutions = 15 </li></ul><ul><li>MFI’s Gross loan portfolio USD, 2008 113.2 million </li></ul><ul><li>Number of active borrowers 2008 334,218 </li></ul><ul><li>All lending institutions need tools for risk management. </li></ul>
  12. 13. Continues…. <ul><li>In absence of these tools, lending if made will be on very limited scale. </li></ul><ul><li>Takaful is one of the most important risk management tool. </li></ul><ul><li>Takaful can provide comfort level to the lending institution by providing following covers depending on type of financing: </li></ul><ul><li>Life and health Coverage of the debtor </li></ul>
  13. 14. Continues….. <ul><li>Coverage for the assets mortgaged by the institution. </li></ul><ul><li>Motor coverage. </li></ul><ul><li>With these services, lending can be made on large scale. </li></ul><ul><li>If any defined loss occurs to the mortgaged property, lending institution will receive compensation from the takaful company </li></ul>
  14. 15. CONCLUSION <ul><li>We have discussed the following reasons due to which Afghanistan needs a Takaful company for: </li></ul><ul><li>Supporting the reconstruction process </li></ul><ul><li>The Stability of economy </li></ul><ul><li>Helping a common man when something goes wrong </li></ul><ul><li>The growth of financial sector </li></ul>
  15. 16. Thank You CENTER OF ISLAMIC BANKING & ECNOMICS Head Office:   192- Ahmad Block, New Garden Town , Lahore, Pakistan  Ph: +92-42-35913096-8, 35858990, 38407850  Fax: +92 -42-35913056 E-mail :  [email_address] Web: http://www.alhudacibe.com