ISLAMABAD, Sept 26 (DNA):Extra attention is needed to boost the emergent takaful market in Pakistan so that share of Islamic financial services can get a boost, an industry expert said.
The decision of SECP to allow conventional insurance firms to launch takaful (Islamic insurance) operations will boost the insurance sector but more is needed to be done, said Mian Shahid, an insurance veteran.
Speaking at a seminar, he said that additional focus on insurance sector will attract dozens of more conventional insurance companies to step into takaful business.
Main Shahid said that new entrants would not only increase competition but penetration which would ultimately befit masses who consider conventional insurance un-Islamic.
He said that around 45-50 companies operating in Pakistan would eventually opt for takaful operations if level playing field was ensured.
Overall insurance penetration has remained less than one percent of the GDP which is lowest in the region while takaful presently constitute about five percent of the total insurance market.
However, the share of takaful is set to increase significantly in few years as some of the leading companies have decided to open takaful windows for their life and general products, he informed.
The fast growing Islamic insurance package is not exclusively meant for Muslims as many think; it has been designed to cater for the needs of non-Muslims as well, he said, adding that Islam is not against the concept of insurance but against the methods that are used in conventional insurance.
Despite problems like scarcity of human resource, lack of awareness, solvency, capital requirements, corporate governance, shortage of shria-complaint assets, distribution, and lack of standardisation, etc a study suggests that the sector will hit mark of $18.6 billion by 2016 and $ 20 billion by 2017, said Mian Shahid. Extended enthusiasm in the $2 trillion global Islamic finance markets is highly satisfying. DNA