BankaTakaful What Banks Expect from Takaful Companies

WTC- 2014 Pervaiz Ahmed

BankaTakaful Defined

• For the banks, the Bankatakaful is marketing third party Takaful products to its customer to

– Earn additional fee based income without deploying its assets

– Protect its assets (acquired through financing) by getting adequate Takaful Cover.

Bankatakaful is similar to bancassurance under conventional insurance with the main different that the insurance products promoted through the banks under bankatakaful are Shariah compliant.

BankaTakaful- Current Status

• Currently the main focus of Takaful companies is to market investment linked long term contracts to the bank customers

• In some territories these investment linked polices are not proving beneficial for the customers and for the banks mainly due to; – high upfront commissions – Inappropriate selling practices and – below par investment performance

• Takaful companies are not offering anything significantly different or

better than conventional insurance

• There is a demand from the banks to extend this relationship to other Life and General Products

Bank’s Customer Segments

Assets Products Liability Products Wealth

Management/Corporates/SMEs

Where the bank has done Financing

Where bank has the

customer deposits

Cross Marketing customers

Takaful Needs of Asset Customers

• Vehicle Takaful

• Life Takaful- DTI Vehicle Financing

• Fire Insurance/Third Party Liability

• Life Takaful- DTI Property Financing

• Marine Insurance Trade Finance

• Life Takaful

• Property Takaful Personal Finance

• Credit Shield, Travel Takaful

• Warranty Takaful, Purchase Protection Debit/Credit Cards

Takaful Needs of Liability Customers

• Depositor’s Insurance Saving Account

• Term Insurance Products Term Deposits

• Education, Savings and Retirement Income Plan

• Cross marketing opportunities for other Life and General Insurance Products

Wealth Management/Corporates/SMEs

Expectations of the Banks

• Banks are moving towards paper less processing. Takaful companies should focus on on-line underwriting and seamless policy issuance processes. No movement of papers !!!

Automation

• Speed is the name of the game. Bank’s customer do not like to fill lengthy forms and go through laborious medical examinations. Higher non-medical limit and non declinature policies are needed

Hassle Free Underwriting

• Low or no allocation in the early years to finance higher commissions will not work in the longer run. Takaful companies should find a way to bring balance between short term gains and long term sustainability

Customer Value for Money

• Takaful companies should bring products which would either yield higher benefit to the customer or add value to the society at large

Product Innovation

Key Success Factors

Commitment from the TOP management of

both the sides

Customer Value for money

Customer Convenience

Thank you!

WTC- 2014 Pervaiz Ahmed