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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
Participants Contribution
Pool of Contributions
Investment in
Shariah ComplaintAvenues
Profit from Investment(Part of the profit goes to the
Company for acting as
mudarib)
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Participants
Participants Contribution
Pool of Contributions
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
Participants Contribution
Pool of Contributions
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
Participants Contribution
Pool of Contributions
Wakala fee, Claims, Re-Takaful Expenses
SURPLUS
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
Participants Contribution
Pool of Contributions
Wakala fee, Claims, Re-Takaful Expenses
SURPLUS
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
Participants Contribution
Pool of Contributions
SURPLUS
Contingency Reserve Charit Distribute Amon Partici ants
Wakala fee, Claims, Re-Takaful Expenses
Investment inShariah Complaint Securities
Profit from Investment
(Part of the profit goes to the
Company for acting as mudarib)
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Participants
Participants Contribution
Pool of Contributions
Contingency Reserve Charity Distribute Among Participants
SURPLUS
Wakala fee, Claims, Re-Takaful Expenses
Investment inShariah Complaint Securities
Profit from Investment
(Part of the profit goes to the
Company for acting as mudarib)
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Participants
Participants Contribution
Pool of Contributions
Contingency Reserve Charity Distribute Among Participants
SURPLUS
Wakala fee, Claims, Re-Takaful Expenses
Investment inShariah Complaint Securities
Profit from Investment
(Part of the profit goes to the
Company for acting as mudarib)
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Participants
Participants Contribution
Pool of Contributions
SURPLUS
Contingency Reserve Charity Distribute Among 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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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 !
mailto:[email protected]:[email protected]