Rizwan Hussain is currently Managing Director of Takaful Pakistan Limited. He recently acquired a majority stake in the company. Prior to this acquisition, Rizwan has served at key positions at EFU General Insurance Limited. He managed several functions at EFU, both insurance and Takaful sales with major areas of interest being marketing, strategy formulation, corporate account management, risk underwriting and claims management. He has more than 30 years of experience as a seasoned professional in risk mitigation. He was promoted to the position of Executive Director at EFU in 2007. He is MBA and a Certified Director from PICG. Over the years he has attended various training programs in Insurance, Takaful, Marketing and Strategic Management. He has participated as key note speaker in several local and international conferences and has conducted trainings on Insurance, Bancassurance, Takaful and Bancatakaful.
Following are excerpts from an exclusive interview with Rizwan Hussain.
Takaful Pakistan was the Platinum sponsor of World Islamic Finance Forum (WIFF) organized by IBA-CEIF. What prompted you to take this step?
Rizwan Hussain: Takaful Pakistan is the Platinum Sponsor of World Islamic Finance Forum (WIFF) arranged by IBA-CEIF. I am a strong believer in Pakistan and have the faith that if right impetuses are provided the country’s GDP growth rate can be boosted. I also believe that Takaful operators and insurance companies not only help in risk mitigation, but these are among the top investors of capital market. This faith prompted Takaful Pakistan to play a role in the efforts to make Pakistan truly ‘Global Hub of Islamic Finance by 2025’.
I envision and sincerely believe that, Pakistan, being the most promising and emerging Islamic Finance Market, has all the fundamental ingredients such as welcoming consumers and corporates, conducive regulatory and supervisory environment, learned and competent Shariah Scholars and committed professionals.
Insurance penetration is very low in Pakistan, what are the key reasons for this?
Rizwan Hussain: Despite steady growth in the recent years, the key reasons for Pakistan being the country with third lowest insurance penetration and density (both life and non-life even in the emerging markets, just two levels above Nigeria and Bangladesh) are lacking mandatory insurance requirements particularly in motor and health insurance. The area of liability / specialty insurance is almost ignored by majority in domestic market, hence, leaving risks on the table.
Also inflexibility towards online resources for insurance penetration and digital distribution channels for turning up the volume is one of the reasons of low insurance penetration in Pakistan.
How would you compare the mind set of individuals and corporate entities?
Rizwan Hussain: On one hand, individuals are more inclined towards carrying on the risk at their own, as it has been a traditional approach and depending on the value of the asset or the capacity of the individual to spare funds for the loss occurring due to the event that may or may not happen.
On the other hand, at the corporate level, the nature of business and stakeholders’ interest are to be looked after by the top management. The impact of loss could be huge and catastrophic for the value chain partners therefore, in majority cases, insurance becomes mandatory for corporate entities.
Risk mitigation is a must, but even Takaful operators have not been able in convincing the people at large to insure their immoveable properties?
Rizwan Hussain: Convincing people beyond their religious beliefs and traditional approach together become a difficult task and requires more rigorous approach from Takaful operators in terms of their performance, making people comfortable and giving them confidence by offering excellent services and professionalism. Educating the philosophy, essence and genuineness of Takaful should be the main areas to focus for Takaful Operator to increase Takaful penetration. Loyalty of customer and trust towards the conventional insurers, due to their presence in the industry for longer time with strong financial and service record, is also challenging for Takaful Operators.
In case of any natural disaster the economic losses run into billions but claims filed are minuscule. What is being done for the creation of awareness about the benefits of getting properties insured?
Rizwan Hussain: Majority of people are not insured under private or government insurance schemes, as many developed countries have launched government insurance schemes for disaster/catastrophic situations and build reserves on their behalf.
It is believed that only those factories are insured, which have borrowed and offered properties as collateral. What is the percentage of factories being insured out of sweet will?
Rizwan Hussain: The obligatory insurance imposed by the institution in such type of transaction forces them to acquire insurance cover. However, the percentage of those obtaining insurance cover at their “sweet will” is very low. Who and to what extent the insurance should be taken is decided by individuals/ entities as per their own risk evaluation expertise, premium payment capacity, but above all understanding of the quantum of damages in case on any eventuality.