Takaful provides insurance cover to those people, who are living below poverty line and are not able to pay the premium of conventional insurance companies, said Chief Executive Officer of Takaful Pakistan Captain M Jamil Khan here on Saturday.
"Over 40 per cent population of the country is living below poverty line and under Takaful, a model would be introduced to bring these people under insurance cover," he said while addressing a seminar on "Takaful-Islamic insurance." The seminar was jointly organised by Al-Huda, Centre of Islamic Banking and Islamic Economics (CIBE) and Rawalpindi Chamber of Commerce and Industry (RCCI).
He said that transparency in Takaful operations had attracted foreign investors and international financial institutions were eager to start Takaful and re-Takaful business in Pakistan. "Pakistani markets have a great potential in Takaful business and, at present, there are two general Takaful companies, which are providing Shariah compliant insurance facilities," he added.
Captain Jamil said that the Takaful was gaining popularity not only in the Muslim world, but also in the European Union (EU) and America, and observed that Takaful was a missing link of Islamic banking and finance.
He said there were 101 Takaful companies operating in over 30 countries round the globe and their number was rising constantly. Besides Muslims, non-Muslims were increasingly opting for Takaful products for commercial benefits. Countries like Luxemburg, New Zealand, England, Russia, South Africa, India, China and the US had already adopted Takaful, he said.
He said that total insurance premium of the Organisation of Islamic Conference (OIC) countries for 2004 was 50 billion dollars, of which Takaful's share was just 2.5 billion dollars or five per cent and it was being expected that it would rise to 15 billion dollars by 2015.
He said that conventional insurance was declared Haram (impure) by Islamic Shariah because it was totally risk-based, having concept of gambling and Riba. He said that Takaful had its roots in Arabs and Hazrat Umar (RA), second Caliph of Islam, had established Takaful as second institution after Baitul Maal. Hazrat Umar (RA) also introduced insurance for workers of Islamic state, he said.
He said that there were four types of general Takaful, including property, marine, motor and miscellaneous Takaful. Speaking next, RCCI President Dr Hasan Sarosh Akram stressed the need for Islamic banking and Islamic insurance in the country.
"We are Muslims and as Islam has prohibited Riba, we have to remain away from this curse", he said, adding that Takaful would not only provide Islamic banking and insurance to people, but would also attract foreign investment in this sector. He said that the Rawalpindi chamber was working to strengthen the economy to enhance exports.