Pakistan’s Salaam Takaful is hoping to complete the product design process for parametric Takaful coverage for Islamic banking products before the end of the year with more partnerships to come, Vice-President of Specialty and Transformation Ali Zaidi told ISFI.
Salaam Takaful entered into a strategic alliance with BankIslami Pakistan earlier in November this year to embed its parametric-based crop Takaful policy into the bank’s agricultural financing offerings.
“As of now, the optimum product design and offering for farmers are currently being discussed by the respective technical teams and hopefully this will be completed before end of 2022,” Ali shared.
With the view that collaboration is much needed in the Pakistani market to benefit the stakeholders, particularly in light of the recent flash floods, the Takaful operator is looking to ramp up collaborations to expand its network and ecosystem.
“We are intending to take this ecosystem to the next level constantly, hence are looking to partner with multiple Islamic banks, agritechs and input providers,” Ali added.
Through the partnership with BankIslami, Takaful will be embedded in a number of BankIslami’s agriculture schemes including the livestock finance (dairy, cattle and poultry financing) product, the Islami Haryali finance (land development and crop growing) product, the Islami tractor and equipment finance product and the Islami agri-machinery/equipment finance product, Ali detailed.
Salaam Takaful will follow its standard mechanism for the partnership. It will structure a product to protect farmers against weather-related risks targeting a few regions for a specified crop.
After the product design is finalized, mapping will be completed and the coverage will be activated. Satellite imagery will be used to monitor the farms against predefined parameters and indices. Advisory will also be provided.
The parametric product is designed in such a way that if the index of a farm meets or exceeds the predefined threshold, Salaam Takaful will pay the farmer up to the sum cover amount as defined in the policy schedule.
Also in November 2022, Salaam Takaful partnered with Dublin-based insurtech Blink Parametric to embed the latter’s parametric product across Salaam Takaful’s travel insurance policies. The partnership was Blink Parametric’s first entry into the Pakistani market. The Takaful operator also partnered with agricultural input provider Syngenta Pakistan in September 2022.