Diversification of Islamic Financial Insturments
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6 The United Insurance Company of Pakistan Limited General
7 TPL Direct Insurance Limited General
8 SPI Insurance Company Limited General
9 Jubilee General Insurance Company Limited General
10 EFU General Insurance Limited General
11 Askari General Insurance Company Limited General
12 Asia Insurance Company Limited General
13 Alfalah Insurance Company Limited General
14 Premier Insurance Limited General
15 Adamjee Insurance Company Limited General
16 UBL Insurers Limited General
17 Atlas Insurance Limited General
18 Reliance Insurance Limited General
19 Sindh Insurance Limited General
20 Allianz EFU Life & Health Insurance General
Source: Created by Author
There is no Re-Takaful operators at present in Pakistan, and this presents a significant
challenge for the Takaful industry. Re-Takaful is essential for the insurance industry, both Life
and non-Life Takaful as it combines several different Takaful pools to create a ‘pool of pools’,
mitigating risks. The coverage amount exceeding the legal ‘retention limit’ has to be covered by
a Re-takaful arrangement. Family Takaful operators in Pakistan are able to avail the large
global capacity of the Re-Takaful industry, using international operators such as Takaful-Re,
Munich-Re, Hannover-Re and Swiss Re-Takaful. This is partially because Family Takaful
products have been in existence for a comparatively longer time period. However, the lack of
local Re-Takaful operators poses a challenge for General Takaful. In view of this, the Shariah
advisors of General Takaful companies in Pakistan have allowed a relaxation in the sharing of
risks, by allowing a ‘co-Takaful’ instrument (5-6 Takaful operators sharing risks).
Wakala-Mudarabah-Waqf Model
In Pakistan, the Shariah advisors and the SECP regulators advise a hybrid model for both
Family and General Takaful operators, based on Wakala, Mudarabah and Waqf. It is commonly
denoted as ‘Wakala-Waqf’ model and is the only model commonly used by Takaful operators.