KARACHI (November 15 2008): The insurance and takaful sector has tremendous potential to grow manifold since overall insurance penetration ratio in Pakistan is just 0.8 percent of GDP, out of which 0.5 percent is of general insurance while 0.3 percent belongs to family or life insurance.

These views were expressed by the CEO of Pak-Qatar General Takaful (PQGTL), M Vaqaruddin, while talking to Business Recorder here on Thursday. He said that 97 percent population in Pakistan is Muslim. "That is a positive point for the growth of Takaful. Usually, we refrain from obtaining conventional insurance which involves mark-up, which is un-Islamic.

But now people have Takaful as an Islamic alternative, which is a comprehensive and Shariah-oriented risk mitigating facility." He said that Takaful in Pakistan is in its stage of infancy, as four out of five takaful companies are yet to complete even one year of their operation.

At present, five Takaful companies are operating in the country; out of which three are general takaful companies, and two are family takaful companies. Takaful is a unique way of mitigating risk in a manner consistent with religious beliefs. "Encouraged by the framing of the rules for Takaful by the SECP in 2005, our Qatri group decided to have both General and Family (Life) Takaful companies in Pakistan ," Vaqar said.

Copyright Business Recorder, 2008