Currently Pakistan ranks ninth globally terms of development of the Islamic financial services industry but some recent purposeful steps would prove to be a game changer, said Mian Shahid, Chairman United International Group (UIG).
Now, the conventional insurance companies in Pakistan are set to make major inroads into the Islamic insurance business with the active support of regulators, he added.
Mian Shahid said that the size of the global Islamic financial industry has been estimated to touch mark of $1.8 trillion soon while Pakistan will become an important player in it due to the largest Islamic market in the world outside Indonesia. Takaful in most markets is still in its infancy and its potential to supersede conventional insurance in Muslim world is still largely unexploited, he said adding that its premiums that exceeded $4 billion in 2007 is expected to reach $20 billion by 2017.
Saudi Arabia, UAE and Malaysia enjoys the lion’s share on account of their advanced Islamic finance sector while Pakistan would need more simplified regulatory frameworks to propel the industry’s expansion, the insurance veteran observed. He said that United Insurance Company (UIC) has become first company to operate Takaful (Islamic Insurance) in Pakistan which has pushed us to look aggressively beyond the borders.
Financial performance and proper handling of key strategic issues remain challenging for Takaful operators, he noted.