Takaful is Islamic insurance which is the most appropriate substitute of conventional insurance for individuals and financial institutions. Takaful is being used by several banks in the world to assist their customers who are paying attention to have the Islamic features of insurance. There are several studies on the comparative performance of the Islamic and conventional insurance companies in Pakistan. Most of the conducted research focused on the demand determinants of the insurance sector. This study is an attempt to provide a fair picture of the Islamic and conventional insurance companies. The purpose of this study is to investigate the factors like profitability, liquidity, risk and solvency and capital adequacy. The data from 4 takaful and 15 conventional insurance companies have been taken from the year 2008 to 2011 as takaful insurance industry have been started in Pakistan in 2006. Descriptive statistics andAnova analysis are applied on the data to find out the performance of insurance companies. The overall result shows that Islamic insurance companies perform well.