SECP commissioner calls for London market collaboration with takaful sector

December 11, 2023 (MLN): To support Takaful companies in developing underwriting capacity for specialized and emerging risks through innovative product solutions, SECP Commissioner of Insurance, Aamir Khan, proposed a collaboration between the London market and the Takaful sector in Pakistan during the 6th Annual IIAL Conference on Friday.

During the conference, the SECP Commissioner of Insurance emphasized the significant transition of Pakistan's financial system towards Shariah compliance.

This shift, aligned with the cultural and religious values of the people, is expected to provide a significant boost to Takaful in Pakistan, as indicated by the recent decision of the Federal Shariah Court of Pakistan.

During his online keynote address, Mr. Khan pointed out the increasing potential for Islamic financial systems, citing the growth of Islamic assets in Pakistan.

Khan further highlighted the flourishing Takaful segment, generating a total revenue of Rs62 billion, representing an 11% growth over the previous year.

The commissioner outlined the five-year strategic plan proposed by the SECP for the insurance sector in Pakistan, to raise the insurance penetration rate from 0.87% to 1.5% of the GDP.

In the Takaful sector, the goal is to increase its contribution to 30% of the total insurance sector. A key focus of this plan is digital transformation, aiming to target a digital distribution channel market share exceeding 5%.

Pointing out challenges faced by the Takaful sector, he highlighted several issues, including the need for re-takaful support due to the transition towards the Islamic financial system, insufficient underwriting expertise, the impact of climate change, and limited awareness.

In conclusion, Aamir Khan emphasized that addressing these challenges requires knowledge sharing.

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