As|m kabban| 10668

Ma[|d Mehmood 10659
MŦ 2u|qarna|n 5aeed 10657
Noman I|yas 10677
5ynops|s
W Introduct|on of Þro[ect
W What |s Insurance?
W What |s convent|ona| |nsurance?
W Modern Insurance Mode|
W now |nsurance |s aga|nst the pr|nc|p|es of 5har|ah?
W 1akafu| (Is|am|c |nsurance)
W 1akafu| Mode|s
W Market Ana|ys|s
W Þak kuwa|t 1akafu| and LIU Genera| Insurance
W Þroducts offered by both compan|es
W Cbservat|ons
Þro[ect Introduct|on
W Þurposeť
1o hlahllahL ulfference b/w ConvenLlonal lnsurance and lslamlc lnsurance
accordlna Loť
ÞroceduresŤ
ÞroducLsŤ
CrowLhŤ
8evenuesŤ
W onsu|tat|onť
nnual reporLs of Þak kuwalL 1akaful CoŦ LLdŦ
nnual reporLs of Llu Ceneral LLdŦ
8eporLs and rLlcles publlshed bv SLCÞ
8eporLs and rLlcles publlshed bv SLaLe 8ank of ÞaklsLan
Insurance Mean|ng
W lnsurance ls a rlsk Lransfer mechanlsmŦ
W ShlfL some of uncerLalnLles of llfe Lo oLhers shouldersŦ
W lnsurance ls used as Lhe back of all lnnovaLorsŦ
W uevelopmenLs were onlv posslble Lhrouah lnsuranceŦ
W lnsurance plavs an lmporLanL role ln economlcţ soclal
and Lechnoloalcal proaress of a manŦ
W 1wo parLles lnvolve( lnsurer and pollcv holders)
onvent|ona| |nsurance
W LqulLable Lransfer of Lhe rlsk of a loss from
one enLlLv Lo anoLherŦ
W Þrovlde premlum and secure larae lossesŦ
W Þeople conLrlbuLe Lo a aeneral sum LhaL could
be used for emeraenclesŦ
W llrsLlv pracLlced ln 1730 8ŦCŦ bv
MedlLerranean Salllna MerchanLs
W 1he Creeks and 8omans lnLroduced Lhe
orlalns of healLh and llfe lnsurance cŦ 600 u
onvent|ona| |nsurance cont'dŦŦŦ
W ln 17
Lh
cenLurvţ Londonƌs arowlna lmporLance as a
cenLre for Lrade lncreased demand for marlne
lnsuranceŦ
W ln 1732 Lhe flrsL lnsurance companv was formed ln Lhe
SouLh Carollnaţ uSŦ
W 1wo Lvpes of economles
Natura| econom|es (wlLhouL monevţ markeLsţ flnanclal
lnsLrumenLs)
Cnlv people use Lo help each oLher
Money econom|es (markeLsţ monevţ flnanclal
lnsLrumenLs)
Modern sense helped buslnesses Lhrouah use of lnsurance
Modern |nsurance mode|
now |nsurance |s aga|nst the
pr|nc|p|es of 5har|ah?
W A|ŴGhararť
8efers Lo 'unknown' or 'uncerLaln' facLors ln a convenLlonal
lnsurance conLracLŦ
lŴ!ahalah
Cambllna
W A|ŴMa|s|rť
1hls Lhe 'aambllna' elemenL and ls sald Lo derlve from Lhe 'Charar'
elemenLŦ
W k|bať
8efers Lo Lhe lnLeresL facLor presenL ln Lhe lnvesLmenL acLlvlLles of
convenLlonal lnsurance companlesŦ
8lba LŴnaslva
8lba lŴlazl
1akafu| (Is|am|c Insurance)
1he word º1akaful" derlved from ºkafala" whlch means ºLo auaranLee"
1akaful means ºauaranLeelna each oLher" or º[olnL auaranLee"
1akaful SvsLem ls derlved from 1abarruƌ svsLem
means ƍdonaLlonŤ alfLŤ conLrlbuLlon"
lL's a muLual fund where all parLlclpanL conLrlbuLes Lo supporL one anoLher ln
dlfflculLles
1akaful was pracLlced ln form of ºqllah" before Lhe era of ÞropheL Mohammad
(Þ8uP)
qllah means compensaLlon bv klller for Lhe helr of vlcLlms
lbu bldln was Lhe flrsL lslamlc Scholar Lo come up wlLh Lhe meanlnaţ concepL and
leaal basls of an lslamlc lnsurance conLracL
1akafu| Mode|s
Jfff (agency) Mode|ť
Jakalah fee ls charaed bv Lhe Lakaful companv Lo meeL
operaLlonal expenses
Charaed annuallv per pollcv
,fff Mode|ť
Ŷ Þollcvholders aeL proflL on Lhelr parL of funds onlv lf 1akaful
Companv earns proflL
Ŷ Sharlna of proflL Ǝ loss b/w Lakaful operaLor Ǝ pollcvholder
Waka|ah p|us Waqf mode|ť
Ŷ ln ÞaklsLanţ mosLlv ºJakal + Jaqf Model" ls ln pracLlceŤ
Ŷ CperaLors and parLlclpanLs malnLaln a Jaqf fundŤ
Ŷ 1he companv pav losses from Lhls fundŦ
1akafu| Mode|s
Þak kuwa|t 1akafu| ompany (Mode|)
Market Ana|ys|s
24Ʒ
24Ʒ
13Ʒ




21Ʒ
Market 5hare of ompan|es
8efore 1akafu|
uM !LL
Llu
nlCL
n!l
PMSPl8L
skarl lnsurance
sla lnsurance
C1PL8S
Note: Above data has been obtained from SECP

93Ʒ
Market 5hare after
1akafu|
1akaful
ConvenLlonal
lnsurance
W Came lnLo exlsLance ln 2004 and sLarLed operaLlons ln 2003
W Ponoured Lo be Lhe flrsL lslamlc lnsurance companv ln ÞaklsLan
W lnlLlal pald up caplLal of 8sŦ 230 mllllon and an auLhorlzed
caplLal of 8sŦ 300 mllllon
W Þk1CL has been lncorporaLed as a !olnL venLure amonasLť
Þroduct and 5erv|ces offered
W MoLor 1akaful
W Marlne 1akaful
W ÞroperLv 1akaful
W Lnalneerlna 1akaful
W 1he Companv was lncorporaLed as a Þubllc LlmlLed Companv
on SepLember 2ţ 1932
W 1he shares of Lhe companv are quoLed on karachl and Lahore
SLock Lxchanaes of ÞaklsLanŤ
W Þrlnclpal place of buslness ls locaLed aL Llu Pouseţ MŦŦ
!lnnah 8oadţ karachlţ ÞaklsLanŤ
W neLwork of 60 branches LhrouahouL Lhe counLrvŦ
Þroducts and 5erv|ces
Marlne lnsurance
llre lnsurance
MoLor lnsurance
Lnalneerlna lnsurance
2ţ783
3ţ204
3ţ497
4ţ248
3ţ168
1ţ348
1ţ819 1ţ794
2ţ074
2ţ941
2ţ816
3ţ030
3ţ381
4ţ139
6ţ033
Ŵ
1ţ000
2ţ000
3ţ000
4ţ000
3ţ000
6ţ000
7ţ000
2000 2001 2002 2003 2004
llre 8uslness
Marlne 8uslness
ccldenL 8uslness
Source: Security and Exchange Commission of Pakistan (SECP)
Ʒ
13Ʒ


35Ʒ


10Ʒ
13Ʒ
20Ʒ
23Ʒ
30Ʒ
33Ʒ
40Ʒ
000 001 00 003 00
G
r
o
w
t
h

r
a
t
|
o
¥ears
Growth kat|o
Growth kat|o of Insurance 8us|ness
8efore 1akafu|
Þrem|um Income I|gures (|n m||||on) as per
keturns kece|ved before 1akafu|
2ţ336
3ţ860
3ţ418
6ţ111 6ţ137
3ţ370
Ŵ
1ţ000
ţ000
3ţ000
ţ000
5ţ000
6ţ000
7ţ000
00 005 006 007 008 009
LIU Genera| Insurance
kevenues
6
117
362
483
812
Ŵ
100
00
300
00
500
600
700
800
900
005 006 007 008 009
Þak kuwa|t 1akafu|
Net Þrof|t
(0)
Ŵ
0
0
60
80
100
10
10
160
005 006 007 008 009
Þ
r
o
f
|
t
Þak kuwa|t 1akafu|
322
306
762
14336
Ŵ3471
732
Ŵ10000
Ŵ5000
0
5000
10000
15000
0000
00 005 006 007 008 009
Þ
r
o
f
|
t
¥ears
LIU Genera| Insurance
kevenuesť Motor Insurance
(In m||||ons)
4Ŧ13393
76Ŧ13233
233Ŧ2933
314Ŧ94903
328Ŧ034
0
100
00
300
00
500
600
005 006 007 008 009
Þak kuwa|t Motor 1akafu|
4ţ033 4042
4ţ364
4ţ131
3ţ374
Ŵ
300
1ţ000
1ţ300
2ţ000
2ţ300
3ţ000
3ţ300
4ţ000
4ţ300
3ţ000
2003 2006 2007 2008 2009
LIU Motor Insurance
Net Þrof|tť Motor Insurance/1akafu|
Ŵ3Ŧ17723 Ŵ0Ŧ68703
6Ŧ00793
13Ŧ1489
93Ŧ376
Ŵ20
0
20
40
60
80
100
120
005 006 007 008 009
Þak kuwa|t 1akafu|
783 1ţ332
(232ţ922)
87ţ743
186ţ691
Ŵ300000
Ŵ50000
Ŵ00000
Ŵ150000
Ŵ100000
Ŵ50000
0
50000
100000
150000
00000
50000
005 006 007 008 009
LIU Genera| Insurance
Þak kuwa|t 1akafu| and LIU Genera| Insurance
(10ţ000)
(5ţ000)
Ŵ
5ţ000
10ţ000
15ţ000
0ţ000
2003 2006 2007 2008 2009
ompar|son of Net Þrof|t
Þak kuwa|t
LIU
L|near (LIU)
Advantages of 1akafu| over the
convent|ona| |nsurance
lull reLurn lf unwllllna Lo conLlnue premlum
lnvesLmenL wlLhouL lnLeresL
lnsured aeL proñLs noL Lhe bonus
aenL's commlsslon pald bv lnsurer Ŷ noL bv lnsured
Þremlum reLurned ln Ceneral lnsurance
dverLlslna cosLs
ulsLrlbuLlon of ZakaL
Cbservat|ons
Issue Conventional Insurance Takaful
Organization Principle ProIit Ior shareholders Mutual Ior participants
Value Proposition ProIit maximization AIIordability & spiritual satisIaction
Laws Secular/Regulations Shariah plus regulations
Ownership Shareholders Participants
Management Status Company management Operator
Form oI Contract Contract oI Sale Cooperative, Islamic contracts oI
Wakala oI Mudarbah with Tabar`ru
(contribution)
Investments Interest based Shariah compliant, Riba-Iree
Surplus Shareholder`s account Participants` account
5uggest|ons
W MarkeLlna approaches for CrowLh
W LducaLlon sesslons for Ceneral publlc
W lncrease operaLlna 8ranches
W Should hlre experlenced Ǝ quallfled
Jorkforce
W locus on lmporL Ǝ LxporL buslnesses

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