takaful

TakafulTakaful
Insurance – the Islamic Way
A Presentation by:
Capt. M. Jamil Akhtar Khan
ACII, MCIT, Master Mariner

Outline of PresentationOutline of Presentation
 Introduction to TakafulIntroduction to Takaful
 Objections to Conventional InsuranceObjections to Conventional Insurance
 Difference b/w Conventional Insurance & TakafulDifference b/w Conventional Insurance & Takaful
 Misconceptions about TakafulMisconceptions about Takaful
 Takaful Through TimeTakaful Through Time
 Takaful WorldwideTakaful Worldwide
 Takaful ModelsTakaful Models
 Takaful ProductsTakaful Products
 Takaful AccountingTakaful Accounting
 ReTakafulReTakaful
 Foundations of Takaful in PakistanFoundations of Takaful in Pakistan
 Takaful Prospects in PakistanTakaful Prospects in Pakistan

Introduction toIntroduction to
TakafulTakaful

 Takaful comes from the Arabic root-wordTakaful comes from the Arabic root-word
‘kafala’- guarantee.‘kafala’- guarantee.
 Takaful means mutual protection and jointTakaful means mutual protection and joint
guarantee.guarantee.
 Operationally takaful refers to participantsOperationally takaful refers to participants
mutually contributing to the same fund withmutually contributing to the same fund with
the purpose of having mutual indemnity inthe purpose of having mutual indemnity in
the case of peril or loss.the case of peril or loss.
Meaning of TakafulMeaning of Takaful

Reference - Al Quran:Reference - Al Quran:
 ‘‘Help (ta awan) one another in furthering virtue (birr)Help (ta awan) one another in furthering virtue (birr)
and Allah consciousness (taqwa) and do not help oneand Allah consciousness (taqwa) and do not help one
another in furthering evil and enmity”another in furthering evil and enmity” al maidah: verse 2al maidah: verse 2
(5:2)(5:2)
 Takaful is a form of mutual help (ta’awun) inTakaful is a form of mutual help (ta’awun) in
furthering good/virtue by helping others whofurthering good/virtue by helping others who
are in need / in hardshipare in need / in hardship

Reference – Hadith:Reference – Hadith:
 ““tie the camel first, then submit (tawakkal) to thetie the camel first, then submit (tawakkal) to the
will of Allah”will of Allah”
The hadith implied a strategy toThe hadith implied a strategy to
mitigate/reduce risk.mitigate/reduce risk.
 Takaful provides a strategy of riskTakaful provides a strategy of risk
mitigation/reduction by virtue of collectivemitigation/reduction by virtue of collective
risk taking that distributes risks and losses torisk taking that distributes risks and losses to
large numbers of participants. This mitigateslarge numbers of participants. This mitigates
the otherwise very damaging losses, if bornethe otherwise very damaging losses, if borne
individually.individually.

Origins of TakafulOrigins of Takaful
 Members of the first Islamic community 14Members of the first Islamic community 14
centuries ago practiced successful schemes ofcenturies ago practiced successful schemes of
co-operative risk sharing.co-operative risk sharing.
 Early precursors were developed in response toEarly precursors were developed in response to
perils and risks associated with long-distanceperils and risks associated with long-distance
trade via caravans or sea voyage and included:trade via caravans or sea voyage and included:
 Hilf (Hilf (undertaking)undertaking)
 Aaqila (Aaqila (pooling of resources for arranging payment of blood money)pooling of resources for arranging payment of blood money)
 Damaan khatar al tarikDamaan khatar al tarik (surety)(surety)

………… origins of Takafulorigins of Takaful
 In the first constitution in Madinah of 622 CE, thereIn the first constitution in Madinah of 622 CE, there
were codified references to social insurance relyingwere codified references to social insurance relying
upon practices like:upon practices like:
 Al – diyah and Al – aqilaAl – diyah and Al – aqila (wergild or blood money to rescue accused in(wergild or blood money to rescue accused in
accidental killing).accidental killing).
 FidyahFidyah (ransom for prisoners of war)(ransom for prisoners of war)
 Dawania – Mutual indemnification amongst officers working inDawania – Mutual indemnification amongst officers working in
the same department during the rule of the 2the same department during the rule of the 2ndnd
Caliph Umar IbnCaliph Umar Ibn
Al Khattab.Al Khattab.
 Cooperative schemes to aid the needy, ill and poor.Cooperative schemes to aid the needy, ill and poor.

Judicial Opinions and FatwasJudicial Opinions and Fatwas
confirming validity of Takafulconfirming validity of Takaful
 Fatwa issued by Higher Council of Saudi ArabiaFatwa issued by Higher Council of Saudi Arabia
in 1397 AH.in 1397 AH.
 Fatwa Issued by the Fiqh Council of MuslimFatwa Issued by the Fiqh Council of Muslim
World League in 1398 AH.World League in 1398 AH.
 Fatwa issued by the Fiqh Council of the OIC inFatwa issued by the Fiqh Council of the OIC in
1405 AH.1405 AH.
 Approval of the Grand Counsel of IslamicApproval of the Grand Counsel of Islamic
scholars in Makkah, Maja Al – Fiqh, in 1985.scholars in Makkah, Maja Al – Fiqh, in 1985.

Takaful – Regulatory FrameworkTakaful – Regulatory Framework
 Takaful Act – 1984 of Malaysia.Takaful Act – 1984 of Malaysia.
 Saudi Arabian Monetary Agency (SAMA)Saudi Arabian Monetary Agency (SAMA)
Regulations of Saudi Arabia - 2004.Regulations of Saudi Arabia - 2004.
 Bahrain Monetary Authority (BMA) Rules –Bahrain Monetary Authority (BMA) Rules –
2005.2005.
 Takaful Rules – 2005 of Pakistan.Takaful Rules – 2005 of Pakistan.

Basic Elements of TakafulBasic Elements of Takaful
 Mutuality and cooperation.Mutuality and cooperation.
 TabarruTabarru (contribution)(contribution)
 Eliminates the elements of Gharrar, Maisir andEliminates the elements of Gharrar, Maisir and
Riba.Riba.
 Wakalah/Modarabah basis of operations.Wakalah/Modarabah basis of operations.
 Joint Guarantee / Indemnity amongst participants –Joint Guarantee / Indemnity amongst participants –
shared responsibility.shared responsibility.
 Constitution of separate “Participants’ TakafulConstitution of separate “Participants’ Takaful
Fund”.Fund”.
 Constitution of “Shariah Advisory Board.”Constitution of “Shariah Advisory Board.”
 Investments as per Shariah.Investments as per Shariah.

Main drivers of TakafulMain drivers of Takaful
 Piety (individual purification)Piety (individual purification)
 Brotherhood (mutual assistance)Brotherhood (mutual assistance)
 Charity (Tabarru or contribution)Charity (Tabarru or contribution)
 Mutual GuaranteeMutual Guarantee
 Community well-being as opposed to profitCommunity well-being as opposed to profit
maximization.maximization.

Objections toObjections to
ConventionalConventional
InsuranceInsurance

Declaration by Shariah scholarsDeclaration by Shariah scholars
rendering conventional insurance un-rendering conventional insurance un-
IslamicIslamic
 Fatwa issued in Judicial Conference held inFatwa issued in Judicial Conference held in
Makkah in Shaban 1398 AH.Makkah in Shaban 1398 AH.
 Verdict of Supreme Court of Egypt on Dec. 27,Verdict of Supreme Court of Egypt on Dec. 27,
1926.1926.
 Unanimous resolutions and fatwa by Ulama inUnanimous resolutions and fatwa by Ulama in
the Muslim League Conference in Cairo in 1965.the Muslim League Conference in Cairo in 1965.
 Unanimous decision by Muslim Scholars inUnanimous decision by Muslim Scholars in
seminar held in Morocco on May 6, 1972.seminar held in Morocco on May 6, 1972.

Objections to Conventional InsuranceObjections to Conventional Insurance
 Elements of:Elements of:
• Uncertainty – GhararUncertainty – Gharar
• Gambling – MaisirGambling – Maisir
• Interest – RibaInterest – Riba
• Risk Transfer MechanismRisk Transfer Mechanism
• UW + Investment Profit belongs to the CompanyUW + Investment Profit belongs to the Company

Uncertainty – GhararUncertainty – Gharar
 Conventional insurance contract is basically a contractConventional insurance contract is basically a contract
of exchange (mu’awadat) i.e. buying and sellingof exchange (mu’awadat) i.e. buying and selling
whereby policy (indemnity) is sold as goods, with thewhereby policy (indemnity) is sold as goods, with the
premium as the price or consideration.premium as the price or consideration.
 The consideration must be certain for an exchangeThe consideration must be certain for an exchange
contract.contract.
 The amount to be paid is not known.The amount to be paid is not known.
 The time it will occur is not known.The time it will occur is not known.
 Thus, it involves an element of uncertainty in theThus, it involves an element of uncertainty in the
subject matter of the insurance sales contract, whichsubject matter of the insurance sales contract, which
renders its void under the Islamic law.renders its void under the Islamic law.

Gambling – MaisirGambling – Maisir
 The insured loses the money paid for theThe insured loses the money paid for the
premium when the insured event does notpremium when the insured event does not
occur.occur.
 The company will be in deficit if claims areThe company will be in deficit if claims are
higher than premium.higher than premium.

Interest – RibaInterest – Riba
 “ …“ …. Allah has permitted trading and forbidden riba”. Allah has permitted trading and forbidden riba”
(Al Baqarah 2 : 275)(Al Baqarah 2 : 275)
 Insurance funds invested in financialInsurance funds invested in financial
instruments which contain element of Riba.instruments which contain element of Riba.

Comparing Takaful to Conventional InsuranceComparing Takaful to Conventional Insurance
IssueIssue 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 Tabar’ruMudarbah with Tabar’ru
(contributions)(contributions)
InvestmentsInvestments Interest basedInterest based Sharia compliant, Riba-freeSharia compliant, Riba-free
SurplusSurplus Shareholders’ accountShareholders’ account Participants’ accountParticipants’ account

Misconception – 1Misconception – 1
• Risk Protection (insurance) is againstRisk Protection (insurance) is against TawakkuTawakkul (totall (total
dependence upon Allah (SWT)).dependence upon Allah (SWT)).
ResponseResponse
• In a Hadith narrated by Anas bin Malik, one day ProphetIn a Hadith narrated by Anas bin Malik, one day Prophet
Muhammed (PBUH) noticed an Arab Bedouin leaving hisMuhammed (PBUH) noticed an Arab Bedouin leaving his
camel untied. He asked the Bedouin, “Why don’t you tiecamel untied. He asked the Bedouin, “Why don’t you tie
down your camel”?down your camel”?
The Bedouin answered, “I put my trust in Allah (SWT)”. ToThe Bedouin answered, “I put my trust in Allah (SWT)”. To
which the Prophet (SAW) replied, “Tie your camel first, thenwhich the Prophet (SAW) replied, “Tie your camel first, then
put your trust in Allah (SWT)”. <put your trust in Allah (SWT)”. <Tirmidhi>Tirmidhi>
Misconceptions about TakafulMisconceptions about Takaful

. . . Misconceptions about Takaful. . . Misconceptions about Takaful
• All risk Protection (insurance) is Haram (prohibited)All risk Protection (insurance) is Haram (prohibited)
ResponseResponse
• Fiqh Council of World Muslim League resolution and FiqhFiqh Council of World Muslim League resolution and Fiqh
Council of Organization of Islamic Conference in JeddahCouncil of Organization of Islamic Conference in Jeddah
resolved that, conventional insurance as presentlyresolved that, conventional insurance as presently
practiced is Haram, and that, cooperative insurancepracticed is Haram, and that, cooperative insurance
(Takaful) is permissible and fully consistent with Shariah(Takaful) is permissible and fully consistent with Shariah
principles.principles.

• All insurance contracts seek to maximize profits, whichAll insurance contracts seek to maximize profits, which
takes benefits away from the policy holderstakes benefits away from the policy holders
ResponseResponse
• Takaful operators are mutual or cooperative entities andTakaful operators are mutual or cooperative entities and
they aim for Community well being and self-sustainingthey aim for Community well being and self-sustaining
operations.operations.
• Under the TakafulUnder the Takaful Wakalah Model,Wakalah Model, the surplus in the fund isthe surplus in the fund is
returned entirely to the policy holders.returned entirely to the policy holders.

Misconception - 4Misconception - 4
• All types of insurance are a form of Gambling or Wagering,All types of insurance are a form of Gambling or Wagering,
which is forbidden in Islamwhich is forbidden in Islam
ResponseResponse
• Risk or Uncertainty can be divided into two classes:Risk or Uncertainty can be divided into two classes:
• Pure Risk (involves the possibility of loss or no loss)Pure Risk (involves the possibility of loss or no loss)
• Speculative Risk (involves the possibility of loss, no loss orSpeculative Risk (involves the possibility of loss, no loss or
gain)gain)
• Takaful insures onlyTakaful insures only Pure Risks and the claims are paid in thePure Risks and the claims are paid in the
event of Loss to cover repairs, damage, replacement ofevent of Loss to cover repairs, damage, replacement of
property, or an agreed fixed sum.property, or an agreed fixed sum.

Takaful Through TimeTakaful Through Time
A chronology of developmentsA chronology of developments

S. NO. EVENTS DATE
1
Prophet Muhammad (PBUH) validated a system of community
self help and financial assistance which later developed into
Takaful.
At the start of Hijri
(During
the 7th Century CE)
2
Unanimous decisions by Muslims & Fatwa issued by National
Religious Council of Malaysia.
1972
3
First International conference on Islamic Economics was held in
Makkah.
1976
4
Fatwa issued by Higher Council of Saudi Arabia in favour of
Islamic Insurance model.
1977
5
Development of Takaful in modern times by establishing the first
Takaful Company in Sudan.
1979
6 First National Reinsurance in Sudan. 1979
………….. Takaful Through TimeTakaful Through Time

S. NO. EVENTS DATE
7
Establishment of The Islamic Arab Insurance Company in
Saudi Arabia which was later relocated in UAE.
1979-80
8 Dar Al Mal Al Islami Trust, Switzerland. 1981
9 Saudi Islamic Takaful and Re-Takaful Company, Bahamas. 1983
10 Islamic Takaful Company in Luxembourg. 1983
11
Development of Takaful in modern times by establishing the
first Takaful Company in Malaysia.
1984
12
Takaful Act, an act passed to provide for the registration and
regulation of Takaful business in Malaysia.
1984

S. NO. EVENTS DATE
13
Takaful Islamic Insurance and Takaful Islamic Re-Insurance
in Saudi Arabia and Bahrain respectively.
1985
14
Saudi Takaful Ltd., the first dedicated Re-Takaful in
Tunisia.
1985
15
International Cooperative & Mutual Insurance Federation
( ICMIF ) started interacting with Takaful operators in a
proactive manner.
1990's
16 Takaful Bangunan IBB, Brunei Darussalam. 1993
17 PT Syarikat Takaful, Indonesia. 1994

S. NO. EVENTS DATE
18 Syarikat Takaful, Singapore. 1995
19 Islamic Insurance Company, Qatar. 1995
20
ASEAN Takaful Group evolved into ASEAN Retakaful
International (ARIL) in Labuan, Malaysia.
1997
21 Establishment of Dubai Takaful Insurance Company, UAE. 1997
22 Establishment of Trinidad-Tobago Takaful Friendly Society. 1999
23 Establishment of Amana Takaful in Sri Lanka. 1999

S. NO. EVENTS DATE
24
A code of Ethics was developed for the Takaful Industry by
Takaful Malaysia and Takaful Nasional.
2000
25 Al Aman Takaful, Lebanon. 2002
26
Incorporation of Pak-Kuwait Takaful Company Ltd., the first
Islamic Insurance operator in Pakistan.
2003
27
International Takaful conference held in London to promote
Takaful business.
2003
28
A paper was published by Bahrain Monetary Agency (BMA)
which proposed rules to regulate the Takaful and
ReTakaful industry.
2004
29
Takaful Insurance forum organized by Egyptian Insurance
Supervisory Authority (EISA) was held for the
recognition of a growing interest in Takaful scheme.
2005
30 SECP notifies Takaful Rules in Pakistan. 2005

Takaful WorldwideTakaful Worldwide
 The first ever Takaful company was established inThe first ever Takaful company was established in
1979 - the Islamic Insurance Company of Sudan.1979 - the Islamic Insurance Company of Sudan.
 70+ Takaful Companies in over 20 countries.70+ Takaful Companies in over 20 countries.
 Takaful premium is 0.1% (USD 3 Billion in 2004) ofTakaful premium is 0.1% (USD 3 Billion in 2004) of
the Global insurance premium and is expected tothe Global insurance premium and is expected to
increase to USD 12.5 Billion by 2015.increase to USD 12.5 Billion by 2015.
 Average growth rate higher than conventionalAverage growth rate higher than conventional
insurance companies.insurance companies.
 Non – Muslims increasingly opting for TakafulNon – Muslims increasingly opting for Takaful
products for commercial benefits.products for commercial benefits.

Mudaraba ModelMudaraba Model
 The surplus is shared between the participants with aThe surplus is shared between the participants with a
takaful operator. The sharing of such profit (surplus)takaful operator. The sharing of such profit (surplus)
may be in a ratio 5:5 , 6:4 etc. as mutually agreedmay be in a ratio 5:5 , 6:4 etc. as mutually agreed
between the contracting parties. Generally, these riskbetween the contracting parties. Generally, these risk
sharing arrangements allow the takaful operator tosharing arrangements allow the takaful operator to
share in the underwriting results from operations asshare in the underwriting results from operations as
well as the favourable performance returns on investedwell as the favourable performance returns on invested
premiums.premiums.

Profits
attributable
to
Shareholders
Company’s
Admin. &
Mangt.
Expenses
Takaful
Contribution
paid by
Participant
General
Takaful
Fund
General
Takaful
Fund
Operational
Cost of
Takaful
Surplus
(Profit)
Participant’s
Share
from Surplus
Company’s
Share from
Surplus
Investment
By
Company
Profit
From
Investments
Company
Participant
Mudaraba Model

Wakala ModelWakala Model
 Cooperative risk sharing occurs among participantsCooperative risk sharing occurs among participants
where a takaful operator earns a fee for services (as awhere a takaful operator earns a fee for services (as a
Wakeel or Agent) and does not participate or a share inWakeel or Agent) and does not participate or a share in
any underwriting results as these belong to participantsany underwriting results as these belong to participants
as surplus or deficit. Under the Al- Wakala model theas surplus or deficit. Under the Al- Wakala model the
operator may also charge a fund management fee andoperator may also charge a fund management fee and
performance incentive fee.performance incentive fee.

General
Takaful
Fund
Operational
Cost of
Takaful/
ReTakaful
Surplus
(Profit)
Surplus
Distribution
to
Participants
Participants’
Takaful Fund
Wakala Model
Takaful
Contribution
paid
by Participant
Company
(Capital)
Mudarib's’
Share
of PTF’s
Investment
Income
Management
Expense
of the Company
Profit/Loss
attributable to
Shareholders
Wakala
Fee
(30% to 35%)
Profit
From
Investments
Investment
Income
Reserves
Investment by
the Company
Investment Income Sharing
on Mudaraba Basis

Wakala -Waqf Model
It is a WAKALAH model with a separate legal entity of WAQF in-between.It is a WAKALAH model with a separate legal entity of WAQF in-between.
 The relationship of the participants and the operator is directly with theThe relationship of the participants and the operator is directly with the
WAQF fund. The operator is the ‘Wakeel’ of the fund and the participantsWAQF fund. The operator is the ‘Wakeel’ of the fund and the participants
pay contribution to the WAQF fund by way of Tabarru.pay contribution to the WAQF fund by way of Tabarru.
 The contributions received would also be a part of this fund and heThe contributions received would also be a part of this fund and he
combined amount will be used for investment and the profits earnedcombined amount will be used for investment and the profits earned
would again be deposited into the same fund which also eliminates thewould again be deposited into the same fund which also eliminates the
issue of Gharar.issue of Gharar.
 Losses to the participant are paid by the company from the same fund.Losses to the participant are paid by the company from the same fund.
 Operational expenses that are incurred for providing Takaful servicesOperational expenses that are incurred for providing Takaful services
are also met from the same fund.are also met from the same fund.

WAQF Fund
Operational
Cost of
Takaful/
ReTakaful
Surplus
(Profit)
Surplus
Distribution
to
Participants
Wakala-Waqf Model
Company
(Capital)
Mudarib's’
Share
of PTF’s
Investment
Income
Management
Expense
of the Company
Profit/Loss
attributable to
Shareholders
Wakala
Fee
(e.g. 30% to 35%)
Investment
Income
Investment
Income
Reserves
Investment by
the Company
Initial Donation
to create
WAQF Fund
Contribution
by
Participant
Investment Income Sharing
on Mudaraba Basis

Models – The beauty of Islam lies in itsModels – The beauty of Islam lies in its
plurality & diversity … !plurality & diversity … !

Takaful ProductsTakaful Products
 General TakafulGeneral Takaful – offers all kinds of non-life– offers all kinds of non-life
risk coverages products like motor takaful,risk coverages products like motor takaful,
marine takaful, fire takaful, home takaful, shopmarine takaful, fire takaful, home takaful, shop
takaful, etc.takaful, etc.
 Family TakafulFamily Takaful – offers life coverage.– offers life coverage.
 Banca-TakafulBanca-Takaful – tailored coverages for banks.– tailored coverages for banks.

Takaful AccountingTakaful Accounting
 Two separate accounts are created:Two separate accounts are created:
1. Participants’ Takaful Fund.1. Participants’ Takaful Fund.
2. Shareholders’ Fund.2. Shareholders’ Fund.
 Separate Accounts are created for:Separate Accounts are created for:
1. Operational activities.1. Operational activities.
2. Investment activities.2. Investment activities.
 Dual audit of all transactions:Dual audit of all transactions:
1. Financial Auditors.1. Financial Auditors.
2. Shariah Auditors. (criteria: Accounting & Auditing2. Shariah Auditors. (criteria: Accounting & Auditing
Organization of Islamic Financial Institutions, AAOIFI).Organization of Islamic Financial Institutions, AAOIFI).

P & L Account - Participants’ Takaful Fund
(Based on Wakala Fee @ 35% (say) (PKR)
ParticularsParticulars YearYear
Gross Written ContributionGross Written Contribution 300,000,000300,000,000
Movement in UCRMovement in UCR (60,000,000)(60,000,000)
Wakala feeWakala fee (105,000,000)(105,000,000)
Total RevenuesTotal Revenues 135,000,000135,000,000
LESS:LESS:
Claims Cost (Including IBNR Claims)Claims Cost (Including IBNR Claims) (100,000,000)(100,000,000)
Claims recoveredClaims recovered 65,000,00065,000,000
Retakaful CostRetakaful Cost (80,000,000)(80,000,000)
Total ExpensesTotal Expenses (115,000,000)(115,000,000)
Underwriting resultUnderwriting result 20,000,00020,000,000
Investment IncomeInvestment Income 2,000,0002,000,000
LESS: Modarib's Share (From Investment Income)LESS: Modarib's Share (From Investment Income) (500,000)(500,000)
Pre-Tax Profit/(Loss)Pre-Tax Profit/(Loss) 21,500,00021,500,000

P & L - Shareholders’ Fund
(Based on Wakala Fee @ 35% (say) (PKR)
ParticularsParticulars YearYear
Share CapitalShare Capital 200,000,000200,000,000
Wakala feeWakala fee 105,000,000105,000,000
Modarib's ShareModarib's Share 500,000500,000
Total RevenuesTotal Revenues 105,500,000105,500,000
LESS:LESS:
Business acquisition cost (Commissions)Business acquisition cost (Commissions) (33,000,000)(33,000,000)
Administration and general expensesAdministration and general expenses
(70,000,000)(70,000,000)
Total ExpensesTotal Expenses (103,000,000)(103,000,000)
Operating ProfitOperating Profit 2,500,0002,500,000
Investment IncomeInvestment Income 20,000,00020,000,000
Net profit / (loss) before taxationNet profit / (loss) before taxation 22,500,00022,500,000

ReTakafulReTakaful
 Currently few ReTakaful companies worldwide offering aCurrently few ReTakaful companies worldwide offering a
relatively small capacity:relatively small capacity:
 Sudan (1979) National Reinsurance.Sudan (1979) National Reinsurance.
 Sudan (1983) Sheikhan Takaful Company.Sudan (1983) Sheikhan Takaful Company.
 Bahamas (1983) Saudi Islamic Takaful and ReTakafulBahamas (1983) Saudi Islamic Takaful and ReTakaful
Company.Company.
 Bahrain/Saudi Arabia (1985) Islamic Insurance andBahrain/Saudi Arabia (1985) Islamic Insurance and
Reinsurance Company.Reinsurance Company.
 Tunisia (1985) B.E.S.T. ReTunisia (1985) B.E.S.T. Re
 Malaysia (1997) ASEAN ReTakaful International.Malaysia (1997) ASEAN ReTakaful International.
 Dubai (2005) TakafulRe by ARIG.Dubai (2005) TakafulRe by ARIG.
 Lloyds of London to form a ReTakaful Syndicate.Lloyds of London to form a ReTakaful Syndicate.
 SwissRe to form a separate ReTakaful PoolSwissRe to form a separate ReTakaful Pool
 MunichRe to form a separate ReTakaful PoolMunichRe to form a separate ReTakaful Pool
 Provision in Takaful Rules – 2005.Provision in Takaful Rules – 2005.

Foundations of Takaful in PakistanFoundations of Takaful in Pakistan
 19491949 - Declaration made in the Objectives Resolution adopted by- Declaration made in the Objectives Resolution adopted by
the Constituent Assembly of Pakistanthe Constituent Assembly of Pakistan “Sovereign state of Pakistan is“Sovereign state of Pakistan is
established to enable Muslims individually and collectively to order their lives inestablished to enable Muslims individually and collectively to order their lives in
accordance with the injunctions of the Holy Qur’an and Sunnah”.accordance with the injunctions of the Holy Qur’an and Sunnah”.
 19731973 - The Constitution of Pakistan declares Pakistan as “Islamic- The Constitution of Pakistan declares Pakistan as “Islamic
Republic of Pakistan and Islam as the official religion of the state”.Republic of Pakistan and Islam as the official religion of the state”.
 19851985 - Objectives Resolution was made ‘substantive’ part of the- Objectives Resolution was made ‘substantive’ part of the
constitution.constitution.
 19831983 to 1989 -to 1989 - The Council of Islamic Ideology held its sessions inThe Council of Islamic Ideology held its sessions in
order to survey the Islamic Insurance System.order to survey the Islamic Insurance System.
 19921992 - The Council of Islamic Ideology submitted its report on- The Council of Islamic Ideology submitted its report on
Islamic Insurance System.Islamic Insurance System.
 20002000 - The Insurance Ordinance defines the term “Takaful” in- The Insurance Ordinance defines the term “Takaful” in
Section 2 and provides for establishment of Takaful companies inSection 2 and provides for establishment of Takaful companies in
the country.the country.
 Sept., 2005Sept., 2005 - Takaful Rules notified .- Takaful Rules notified .

Takaful Prospects in PakistanTakaful Prospects in Pakistan
 97% Muslim population.97% Muslim population.
 Demand for insurance increasing with increase in perDemand for insurance increasing with increase in per
capita income.capita income.
 Personal lines insurance business (leasing, health,Personal lines insurance business (leasing, health,
Medicare) growing at a higher rate than otherMedicare) growing at a higher rate than other
conventional classes.conventional classes.
 Islamic banking on sound footing with support of theIslamic banking on sound footing with support of the
Govt.Govt.

ConclusionConclusion
 Takaful defined.Takaful defined.
 Difference with conventional insurance.Difference with conventional insurance.
 Takaful ModelsTakaful Models
 Takaful WorldwideTakaful Worldwide
 Prospects and Outlook.Prospects and Outlook.

Thank you for your attentionThank you for your attention

takaful

More Related Content

What's hot

Similar to takaful

Recently uploaded

takaful