Islamic insurance penetration to ensure stability: Pakistan Economy Watch

ISLAMABAD: The Pakistan Economy Watch (PEW) on Tuesday said SECP’s move to push Sharia compliant risk coverage in Pakistan is to benefit millions and triple insurance density as well as penetration.

Islamic insurance can benefit those who do not subscribe to the conventional insurance forbidden by the Sharia law. This Halal risk mitigation has been growing 15 per cent annually, however it grew 31 pc in 2011, said Dr. Murtaza Mughal, President of the PEW.

He said that approval Draft Takaful Rules 2012, plan to set up a central Sharia board, and allowing conventional insurers to initiate Takaful operations are the steps which should have been taken before.

Pakistanis spend around Rs 107 billion on life and non-life insurance or Rs 593 per capita which is one of the lowest in the world, , he informed.

Dr. Murtaza Mughal said that current insurance penetration in Pakistan stands at around 0.7 per cent while insurance density is recorded at 6.13 dollars.

He said that share of Takaful is 1 per cent of the global insurance market while it enjoy 2 pc of the market in Pakistan which is to get a boost as the top ten companies having 93 per cent of the market share are preparing to exploit the potential.

According to Ernst & Young, global Takaful contributions which were $9.15 billion in 2010 and $12 b in 2011, are expected to touch $25 bln by 2015.

Muslims are 20 pc of the world’s population but Takaful has 1pc share that underline the need for immediate legislation and ambitious penetration.

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