United Insurance Company of Pakistan will seek shareholder approval to offer Islamic insurance (takaful) products, a month after regulators cleared the way for conventional firms to enter the sector.

The regulatory change aims to increase insurance penetration in Pakistan, which remains the third-lowest in Asia.

United Insurance will seek approval in an extraordinary general meeting on Thursday, allowing it to provide takaful and retakaful products both locally and overseas, the insurer said in a bourse filing.

While takaful's share of Pakistan's total insurance market is currently estimated at less than 3 percent, the entry of conventional players is widely expected to boost consumer participation in the sector. Lahore-based United has 100 branches across the country, with business lines in areas such as health, travel, livestock and crop insurance.

Pakistan introduced new takaful rules in 2012, allowing the use of takaful windows, which enables insurers to offer sharia-compliant and conventional products side by side, provided client money is segregated.

This prompted a legal challenge by the country's five takaful firms, which was cleared last month after an agreement that requires insurers to allocate 50 million rupees ($506,100) in capital to their window operations, compared to no capitalisation requirement in the original rules.

The regulator told Reuters last month that it had received five applications for takaful windows and expected as many as half of all conventional insurers in Pakistan to apply for a licence eventually.