Exclusive Interview with Azeem Pirani

Tell me something about yourself and your organization, please?

I am CEO of Pak-Qatar Family Takaful Limited and have over 21 years of vast experience of Banking & Islamic Finance industry. I have a Postgraduate Diploma in Islamic Banking and Finance from the Center of Islamic Economics in Pakistan and an MBA in International Business from the University of New Brunswick in Canada.

Before joining Pak-Qatar Takaful, I was the Regional Head for Pakistan at FWU AG (a leading life insurance company based in Munich (Germany), for distribution of Takaful policies through banking channels). As the main representative for the Munich headquartered company in Pakistan, I was responsible for setting up the branch as well as putting in place the required agreements to enable it to carry out its business of facilitating BancaTakaful.

Pak-Qatar Family Takaful Limited (PQFTL) is the first and largest dedicated Family Takaful Company in Pakistan. PQFTL is a progressive and a technology-driven Shariah Compliant company providing innovative Takaful solutions since 2007. PQFTL is the fastest growing Family Takaful operator in the country.

PQFTL has a vision of providing financial protection through Takaful to everyone. The company’s shareholders include some of the strongest financial institutions in the state of Qatar such as Qatar Islamic Insurance Company (QIIC) and Qatar International Islamic Bank (QIIB).

An independent Shariah Advisory Board chaired by Mufti Muhammad Hassaan Kaleem certifies all products and operations for Shariah compliance. Mufti Muhammad Taqi Usmani was the founding Chairman of the group’s Shariah Advisory Board since inception.

The company is rated “A+” (having Stable Outlook) by JCR-VIS Credit Rating Co. Limited and Pakistan Credit Rating Agency (PACRA). The Company’s paid-up capital is in excess of Pak- Rs. 1.81 Billion. Pak-Qatar Family Takaful Limited has one of the largest Takaful branch networks across Pakistan (over 160 branches in 100+ cities), in addition to about 2,675 bank branches in over 100 cities that provide BancaTakaful products.

Pak-Qatar Family Takaful (PQFTL) is currently providing need-based financial protection to more than 1000 corporate clients and over 560,000 Individual Takaful members for Individual Family, BancaTakaful, Group Family and Group Health business segments.

Q 2. How would you comment on the elimination of Riba?

Riba prohibited in the Holy Quran in clear terms refers to all types of illegal income and illegitimate earnings from sources such as corruption, bribery, fraud, exploitation, rent-seeking and so on.

Prohibition of Riba means, in essence, that capital alone cannot be allowed to create additional wealth. This is the reason why when a person is lent money, even for productive purposes, the lender is entitled to get back only the sum lent by him. Since he did not participate in the productive process, nor did he share the risks of the entrepreneur, he cannot demand a share in the additional wealth that his capital may have helped to create.

To eliminate Riba, we have to create an economy based on equity capital instead of debt or equity-cum-debt.

Q 3. How could the Takaful sector promote Islamic Finance in the Country?

The Islamic finance industry is made up of three sections: Islamic banking, Islamic capital markets and Islamic insurance or Takaful. However, Takaful remains the smallest contributor to the Islamic finances industry in terms of assets.

Islamic Finance and Takaful have its appeal for the strong ethics of the system of fairness, transparency, distribution of wealth leading to social goodness and environmentally friendly focus for generating economic activity. It discourages creating money from money and hence interest. It links deposits and investments to real underlying assets. With these principles the Islamic Financial institutions have managed to maintain more consistent returns, even during the economic downturn.

Islamic Banks should cover their assets through Takaful companies which will definitely promote the Islamic finance industry as a whole. Same should be the case with Islamic capital markets.

Islamic finance is a specialist area that presents exciting growth opportunities. The industry’s increasing importance for Islamic products and other investors around the world is evidenced by its steady growth in recent years. Potential future growth prospects are robust, supported by demographic trends all over the world.

Research says that more than 60% of Pakistan’s population is below 30 and make up a major chunk of the current workforce. There are also clear behavioral differences in their media viewing habits and their buying decisions are driven by online research. To promote the Islamic Finance industry, we need to focus on Millennials and Gen-z as social media has become the most powerful tool to promote products, services and create awareness.

Q 4. How would you compare the Takaful Sector of today with that of the past?

Things have changed a lot. Earlier, it was very tough convincing masses, talking to them in detail. With the passage of time, the level of awareness has increased and people are now quite familiar compared to few years back. I would like to comment that Islamic banking has played a key role in awareness of Takaful (Islamic Insurance). The Takaful industry is not only gaining acceptance but also growing at a global level. Awareness sessions, conferences, seminars & roadshows all over the world are also gaining momentum which was not the case earlier. I am quite hopeful that this industry will grow in future at a rapid pace and the only challenge is creating much more awareness amongst the masses and emphasizing about the importance of protection to all.

Q 5. Please explain the benefits of Takaful?

Takaful plans are beneficial to anyone looking to protect their family, assets/property and themselves from financial risk/losses:

  • Takaful coverage helps in protecting the future of your child in terms of his/her education. They will make sure that your children are financially secured while pursuing their dreams and ambitions without any compromises, even when you are not around
  • Takaful coverage will help you pay for medical emergencies, hospitalization, contraction of any illnesses and treatment, and medical care required in the future.
  • The financial loss to the family due to the unfortunate death of the sole earner can be covered by Takaful plans. The family can also repay any debts like home loans or other debts
  • Takaful plans come with savings and investment schemes along with regular coverage. These help in building wealth/savings for the future through regular investments. You pay contributions regularly and a portion of the same goes towards life coverage while the other portion goes towards investment plan
  • Takaful helps protect your home in the event of any unforeseen calamity or damage. Your home Takaful coverage plan will help you get coverage for damages to your home and pay for the cost of repairs or rebuilding, whichever is needed.

Q 6. Could you tell us about the future strategies and products of Takaful sector?

There are ample opportunities for developing the Takaful industry nationwide. Any attempt to gain the market share without genuine effort to provide fair system will be of limited value. Takaful offers opportunities to expand the size of industry by focusing upon the element of protection, addressing the needs of customers and using appropriate distribution channels. The attraction of Takaful is not only the fact that it is based on Shariah guidelines but because it is a fair system offering ethical protection.

It took a disease (COVID-19) for people to wake up and realize the importance of Takaful/Insurance and we noticed more and more people calling us to inquire about life coverage which was not the case earlier.

We almost have all products for our customers which our competitors offer. We keep on offering more innovative products as per our customers’ needs. Our future plans are to offer our wide range of products through digital medium which I believe is need-of-the-hour. Capturing the digital medium and offering convenience to our customers on their fingertips is what we are aspiring for. Due to Covid-19, the dynamics have changed a lot and we have to look for opportunities and challenge ourselves in order to succeed and survive.