The Securities and Exchange Commission of Pakistan (SECP) has released a detailed study highlighting the current state and future outlook of the Takaful sector in Pakistan. Despite being present in the country’s insurance landscape since 2005, the Takaful sector currently constitutes only about 12 percent of the total insurance contributions in Pakistan, according to the findings of the newly published diagnostic report titled “Future of Takaful in Pakistan.”
The comprehensive study, made available on the SECP’s official website, offers an in-depth examination of the sector’s performance over the years, comparing its growth trajectory with conventional insurance products while also assessing its structural and regulatory maturity. It benchmarks the evolution of Takaful in Pakistan against international leaders in Islamic insurance such as Malaysia, Saudi Arabia, Sudan, and Indonesia, highlighting where Pakistan stands and what strategic lessons can be adopted.
The report identifies multiple growth bottlenecks that have hindered the sector’s expansion. These include low public awareness about Takaful offerings, governance and trust issues within some operators, gaps in the positioning of products, a shortage of skilled professionals, limited Retakaful (reinsurance in Takaful) options domestically, and challenges within the existing regulatory infrastructure.
Despite these hurdles, SECP’s study recognizes the increasing shift in Pakistan’s financial ecosystem toward Islamic finance and outlines actionable steps to encourage the development of a robust Takaful framework. Among the proposals are the need for regulatory enhancements, targeted awareness campaigns to educate the public about Takaful products, improved collaboration between key stakeholders, and greater investment in human capital specialized in Shariah-compliant financial services.
Additionally, the study recommends building capacity within the domestic Retakaful space to reduce reliance on foreign entities and to develop local risk-sharing frameworks that align with Islamic financial principles. The SECP emphasizes that an integrated approach, involving policymakers, insurance operators, Shariah advisors, and technology partners, will be vital to advancing the Takaful industry.
The report comes at a time when Islamic finance is steadily gaining traction in Pakistan’s broader financial landscape. With the growth of Islamic banking, Sukuk investments, and other Shariah-compliant financial products, the Takaful sector is being positioned as a complementary pillar to support this evolving market. However, to capitalize on this momentum, the SECP believes that structural reforms and collective commitment from the industry will be essential.
The SECP is encouraging all relevant stakeholders—including insurers, regulators, policy influencers, and Shariah governance professionals—to review the study and contribute to the next phase of strategic growth. The ultimate objective is to build a more inclusive, transparent, and sustainable Takaful ecosystem that aligns with both consumer needs and Islamic financial ethics.
As Pakistan aims to strengthen its Islamic finance industry and broaden financial inclusion, the Takaful sector’s transformation will play a pivotal role in shaping a more balanced and accessible insurance market.