Likewise, world-wide, Takaful premium is set to witness growth as it is expected to increase $12.5 billion by 2015 from $3 billion, which is 0.1 percent of the global insurance.
Another reason for growth is higher average growth rates of Takaful than conventional insurance companies, which is even attracting non-Muslims, who are increasingly opting for Takaful products for commercial benefits.
These observations were made in a presentation on "Takaful- an Islamic Form of Insurance" by Captain M Jamil Akhtar Khan, Head of Operations Pak-Kuwait Takaful Company Ltd at a seminar, organised by Institute of Chartered Accountants of Pakistan (ICAP) here on Wednesday.
He pointed out that demand for insurance in Takfual and other conventional forms of insurance is increasing in Pakistan, which is hopefully boosting the insurance sector of the country, which has making good strides due to economic growth.
On future growth of Takaful, Captain Jameel was of the view that it is poised to grow due to many reasons particularly sound health of Islamic banking with the support of government.
He told the audience that first ever Takaful Company, Islamic Insurance Company Sudan, was established in 1979 and presently the number of such companies reached 70 in over 20 countries of the world.
There are three types of Takaful products. General Takaful offers all kinds of non-life risk coverage products like motor takaful, marine takaful, fire takaful, home takaful, shop takaful etc.
Secondly, family takaful offers life coverage and Banca Takaful tailored coverage for banks.
Captain Jameel pointed out the basic elements of Takaful, which includes mutuality and co-operation, contribution, eliminates the elements of Gharrar, Maisir and Riba, Wakalah/Modarabab basis of operation, joint guarantees, constitution of separate "participants" Takaful fund, constitution of shariah Advisory Board and investments as per shariah.
He said that main drivers of takaful are piety (individual purification), brotherhood (mutual assistance), charity (contribution), mutual guarantee and community well being as opposed to profit maximisation.
He said that there are certain objections to conventional insurance like elements of uncertainty, gambling, interest etc.
Abdul Rahim Abdul Wahab, Executive Director & Actuary Sidat Hyder Morshed Associates also spoke.