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    The success of Retakaful
 
−
    Arab Insurance, outlook and
 
−
    actual new economical situation
 
−
Farid Benbouzid  Cairo 20 & 21-07-05 1
 
  
−
Overview
 
−
      Introduction
 
−
      Achievements
 
−
      Challenges ahead
 
−
      Strategy
 
−
      Conclusion
 
−
Cairo 20 & 21-07-05    2
 
  
−
Introduction
 
−
      Conventional insurance
 
−
      Takaful Concept
 
−
      Retakaful concept
 
−
Cairo 20 & 21-07-05          3
 
  
−
Insurance not permissible
+
== Top 20 FREQUENT WORDS ==
−
      Uncertainty (Gharar)
+
enrichment 9
−
      Gambling (Maisir)
+
faith 9
−
      Interest (Riba)
+
intellect 9
−
Cairo 20 & 21-07-05        4
+
posterity 9
 +
wealth 9
 +
development 8
 +
maqasid 6
 +
aql 5
 +
education 5
 +
freedom 5
 +
nasl 5
 +
shariah 5
 +
social 5
 +
employment 4
 +
moral 4
 +
nafs 4
 +
solidarity 4
 +
din 3
 +
equitable 3
 +
falah 3
 +
mal 3
 +
political 3
 +
removal 3
 +
research 3
 +
security 3
 +
trust 3
 +
vision 3
 +
vol 3
  
−
Takaful concept
 
−
      1985 Grand Council of scholars approved
 
−
      Takaful
 
−
      Method and means left to scholars and
 
−
      practitioners
 
−
      Must have :
 
−
          Permanent Sharia Advisory Board
 
−
          Sharia compliant investment strategy
 
−
          Operating model based on Shariaa concepts
 
−
Cairo 20 & 21-07-05                                    5
 
  
−
Operating models
 
−
      Pure mudharabah
 
−
      (Sudan)          Family takaful
 
−
      Modified
 
−
      mudharabah      General Takaful
 
−
      (Malaysia)
 
−
      Wakala (Bahrain)
 
−
Cairo 20 & 21-07-05                    6
 
  
−
Re-Takaful concept
+
== DOCUMENT KEY POINTS ==
−
      Preferred reinsurance is proportional
+
*the islamic vision of development in the light of maqasid al shariah m
−
      (quota share or surplus)
+
*umer chapra research adviser irti idb
−
      Non proportional permissible
 
−
      If Re-takaful is unavailable, then it is
 
−
      permissible to use a conventional
 
−
      reinsurer
 
−
Cairo 20 & 21-07-05                            7
 
  
−
Overview
+
*are these maqasid independent of each other or are they interdependent a c the human self pv a a a c faith rf a a a c intellect y a a a c posterity yiv a a a c wealth a aa x a a
−
      Introduction
+
*do we just safeguard or do we go beyond this to enrich and strengthen
−
      Achievements
 
−
      Challenges ahead
 
−
      Strategy
 
−
      Conclusion
 
−
Cairo 20 & 21-07-05    8
 
  
−
Achievements
+
*figure enrichment of faith worldview tawh d khilafah ris lah and khirah values education rules of proper motivation moral as well as behaviour material justice freedom security of life property and honour honesty removal of poverty equitable family integrity fulfillment of all socioneed fulfilment of all distribution social solidarity economic and political employment and human and political obligations patience self employment brotherhood stability thriftners prudence opportunities tolerance mutual care and trust etc
−
      Takaful industry
+
*good governance enrichment of self intellect and posterity well being of all fal h
−
      Retakaful industry
 
−
      Best Re’s position
 
−
Cairo 20 & 21-07-05      9
 
  
−
Takaful Industry in the World
 
−
      World Premiums 2003
 
−
                     USD 2.6 trillions
 
−
      Takaful contributions 2002
 
−
                     USD 2.1billions
 
−
      Number of companies
 
−
                      59
 
−
      Number of countries
 
−
                     23
 
−
Cairo 20 & 21-07-05                    10
 
  
−
Takaful Industry in the World
+
''Please note, This is an auto generated summary based on sentances position in the document and other factors''
−
                      Geographical Spread
+
== DOCUMENT WORD ANALYSIS ==
−
                                          Mid-East
+
=== Main Category ===
−
                    7% 1%
+
: AlHuda Material\takaful
−
                                          South &
 
−
                                          East Asia
 
−
                                          Africa
 
−
        36%                          56%
 
−
                                          Others
 
−
Cairo 20 & 21-07-05                                  11
 
  
−
Takaful industry in EM
 
−
      EM Takaful contributions 2002
 
−
                     USD 2 billions
 
−
      EM/WW Takaful contributions
 
−
                     99%
 
−
      EM Total Premiums
 
−
                     USD 217 billions
 
−
      Number of Companies
 
−
                     >45
 
−
Cairo 20 & 21-07-05                    12
 
  
−
Main EM Takaful Markets
+
=== KeyWords ===
−
      GCC
+
taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme
−
      Malaysia
 
−
      Other Arab countries
 
−
      Other South & East Asia
 
−
Cairo 20 & 21-07-05            13
 
  
−
Retakaful cessions drivers
 
−
      Heavy exposure to cat events
 
−
                     > No exposure to cat events
 
−
      Small local players
 
−
                     > Larger international insurers
 
−
      Specific line or customer Group focused
 
−
                     > Multiline insurers
 
−
      Commercial lines (Aviation)
 
−
                     > Personal lines (Motor)
 
−
Cairo 20 & 21-07-05                                  14
 
  
−
Retakaful cessions drivers
 
−
      Life protection lines
 
−
                     > Life saving
 
−
      Expansion into new products
 
−
                     Or regions
 
−
      Regulatory and rating considerations
 
−
                     Solvency ratio and claims payment ability
 
−
Cairo 20 & 21-07-05                                            15
 
  
−
High demand for Retakaful
+
== RELATED DOCUMENTS ==
−
      Many of Takafuls are local players
+
:[[A Review of Takaful by Prof. Khawaja Ahmed Saeed]]
−
      Many of them are also newly set up
+
:[[Agency Management,Training and Incentive Programme]]
−
      Small takaful market
+
:[[Audit Issue of Islamic Banking]]
−
                     In number
+
:[[Banca Takaful by Faisal Shahzad Abbassi]]
−
                     In size
+
:[[Best Practices from e- Insurance to e-Takaful by Sami Guello]]
−
      Rely heavily on Retakaful support
+
:[[Calculated Risks, Measurable Results]]
−
      Demand for Retakaful expected to grow with
+
:[[Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz ]]
−
      industry
+
:[[Co-Operative Insurance and Takaful]]
−
Cairo 20 & 21-07-05                            16
+
:[[Current Achievements of Takaful by Dr. S. J Malaikah]]
 +
:[[International Cooperative & Mutual Insurance Federation]]
 +
:[[Islamic Banking And Finance Malaysia’s Experience And Achiev]]
 +
:[[Islamic Finance & Investment Symposium by Sohail Jaffar]]
 +
:[[Islamic Insurance in 21st Century by Ahmad Feizal]]
 +
:[[Islamic Insurance Opertunities and Challenges]]
 +
:[[Issues and Challenges in Retakaful by Azman Ismail]]
 +
:[[Leveraging BancaTakaful as a Key Growth Channel by Mr. Rohai]]
 +
:[[Life Family Takaful by Mr. P Ahmed]]
 +
:[[Micro Insurance Co-Operative and Takaful]]
 +
:[[Micro Takaful by Shabir Patal]]
 +
:[[Microinsurance and Takaful]]
 +
:[[Microinsurance, cooperatives and Takaful]]
 +
:[[MicroTakaful – the way forward by Capt. M. Jamil Akhtar]]
 +
:[[Opertunities in Islamic Insurance]]
 +
:[[Present Scenario and Future Potentials of Takaful by Kazi Md]]
 +
:[[ReTakaful by Rohail Ali Khan]]
 +
:[[Syariah Compliant General Takaful Products by Sami Guellouz]]
 +
:[[Takaful and Mutuality by Mohd. Masua Billah]]
 +
:[[Takaful by Abdul Rahim]]
 +
:[[Takaful for Microfinance]]
 +
:[[Takaful Opperunities and Challenges By Azeem Pirani]]
 +
:[[Takaful Products Family Takaful Linked Investment Plans by S]]
 +
:[[Takaful World Prospective Middle East & North Africa]]
 +
:[[Takaful]]
 +
:[[Takful - Zubair Mughal]]
 +
:[[Takful Report]]
 +
:[[The Islamic Vision Presentation]]
 +
:[[The Success of Retakaful by Farid Benbouzid]]
  
−
Unsufficient supply
 
−
      Very few Professionnal Retakafuls
 
−
                     2 (Best Re, Asean Re - ARIL)
 
−
      Takafuls accept a small part of
 
−
      Retakaful business from each other
 
−
Cairo 20 & 21-07-05                                17
 
  
−
Takaful dilemma
 
−
      Participants opt for the product because
 
−
      it is sharia compliant
 
−
      Takafuls forced to cede business to
 
−
      conventional reinsurance
 
−
      Otherwise disappear !
 
−
Cairo 20 & 21-07-05                          18
 
  
−
Retakaful dilemma
+
== DOCUMENT REFERENCES ==
−
      Retakafuls are Takafuls focused
 
−
      Retakafuls forced to accept business
 
−
      from conventional market
 
−
      Retakafuls forced to retrocede business
 
−
      to conventional market
 
−
      Otherwise disappear !
 
−
Cairo 20 & 21-07-05                          19
 
  
−
Best Re
 
−
      Modified Mudharaba model
 
−
      Permanent Shariaa Board
 
−
      Avoids “Ribaa”
 
−
                     Interest on deposits are offset
 
−
                     Investments are compliant with “Shariaa”
 
−
                      requirements
 
−
      Manages separate accounts
 
−
                     Ceding companies account (Technical operations)
 
−
                     Shareholders’ account (Shareholders’ operations)
 
−
Cairo 20 & 21-07-05                                                    20
 
  
−
Best Re
+
=== Number of Pages ===
−
      Niche market player set up in 1985
+
11
−
      Internationally recognized as Retakaful
 
−
      Strong capital basis and claims-paying
 
−
      ability
 
−
      Well rated by well reputed agencies
 
−
                     Standard & Poor’s : BBB (Stable Outlook)
 
−
                     AM Best          : B++ (Very Good)
 
−
Cairo 20 & 21-07-05                                            21
 
  
−
Best Re
 
−
      Accepted contributions from Takafuls (2003)
 
−
                     USD 8 millions out of 62
 
−
      In % of whole portfolio
 
−
                     13%
 
−
      Markets
 
−
                     16
 
−
      Number of Ceding Takafuls
 
−
                     28
 
−
      Number of Contracts
 
−
                     319
 
−
Cairo 20 & 21-07-05                              22
 
  
−
Overview
+
=== Published Date ===
−
      Introduction
+
2010-05-29 17:59:05
−
      Achievements
 
−
      Challenges ahead
 
−
      Strategy
 
−
      Conclusion
 
−
Cairo 20 & 21-07-05     23
 
  
−
Challenges ahead
 
−
      Mission statement
 
−
      Takaful growth perspectives
 
−
      Learn from conventionals
 
−
      Retakafuls’ duties
 
−
Cairo 20 & 21-07-05                24
 
  
−
Mission statement
+
== Full Document ==
−
  Pave the way for takafuls to achieve their
 
−
  growth potential and build a strong and
 
−
  sound industry
 
−
Cairo 20 & 21-07-05                      25
 
  
−
Takaful growth perspectives
 
−
      Non life insurance demand in EM
 
−
      Life insurance demand in EM
 
−
      Outlook
 
−
Cairo 20 & 21-07-05                    26
 
  
−
Non-life insurance demand
+
[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/Takaful/The%20Islamic%20Vision%20Presentation.pdf Read the Full Document]
−
      Low Premium as % of GDP
 
−
                     Min = 0.2% (Bangladesh)
 
−
                     Max=2.9% (Jamaïca, South Africa)
 
−
      Low per-capita Spending
 
−
                     Min = USD 8 (Africa)
 
−
                     Max = USD 54 (Latin America)
 
−
Cairo 20 & 21-07-05                                    27
 
  
−
Life insurance demand
 
−
      Very low Premium as % of GDP
 
−
                     Min = 0% (Saudi Arabia)
 
−
                     Max = 3.8% (Trinidad & Tobago)
 
−
      Very low per-capita Spending
 
−
                     Min = USD 14 (Middle East)
 
−
                     Max = USD 30 (South & East Asia)
 
−
Cairo 20 & 21-07-05                                    28
 
  
−
Outlook
+
[[Category:Islamic Finance]]
−
      Large potential
 
−
                     to be captured
 
−
      Takaful is a specific answer
 
−
                     to an unfulfilled demand
 
−
      Takaful could capture a large part of
 
−
      the population
 
−
                     which would not, otherwise, insure.
 
−
Cairo 20 & 21-07-05                                      29
 
  
−
Takaful Growth Perspectives
+
[[Category: Takaful]]
−
      New markets likely to introduce Takaful
 
−
      in the near future
 
−
                     Philippines, Bangladesh, Former Soviet Union,
 
−
                      South Africa etc.
 
−
      Takaful windows set up by conventional
 
−
      insurers
 
−
                     Good indicators of brand success
 
−
Cairo 20 & 21-07-05                                                30
 
−
 
 
−
Takaful Growth Perspectives
 
−
      Strong growth trend in South & East
 
−
      Asia
 
−
                     +30% p.a. in Malaysia
 
−
                     likely to continue
 
−
      Sustained average growth in double
 
−
      digits in the coming years
 
−
                     +15% p.a.
 
−
Cairo 20 & 21-07-05                        31
 
−
 
 
−
Learn from conventionals
 
−
      250 professional reinsurers
 
−
      2003 ceded premiums : USD 176 billion
 
−
               Non life reinsurance :
 
−
                       USD 146 billion (13.7% insurance premiums)
 
−
               Life reinsurance :
 
−
                       USD 30 billion (1.9% insurance premiums)
 
−
Cairo 20 & 21-07-05                                                32
 
−
 
 
−
Learn from conventionals
 
−
      Top ten reinsurers market share :
 
−
                     54%
 
−
      Shareholders equity of top 40 :
 
−
                     USD 249 billion
 
−
      Of top ten, 6 have a financial strength rating:
 
−
                     At least “AA-” by S&P (very strong financial security)
 
−
      Stable and sound capital base for reinsurance
 
−
      industry :
 
−
                     Negligeable bankrupties between 1980-2003
 
−
Cairo 20 & 21-07-05                                                        33
 
−
 
 
−
Reinsurance cessions drivers
 
−
      Reduced uw results volatility
 
−
                     Escape from insolvency in case of cat event
 
−
      Capital relief and flexible financing
 
−
                     Accept more business with the same capital
 
−
      Access to reinsurers’ expertise and
 
−
      services
 
−
                     Product development
 
−
                     Pricing
 
−
                     Underwriting
 
−
                     Claims management
 
−
Cairo 20 & 21-07-05                                              34
 
−
 
 
−
Reinsurers have to be financially
 
−
secure
 
−
                    Part of underwriting risk
 
−
    Insurer                                      Reinsurer
 
−
                        Counterparty credit risk
 
−
Cairo 20 & 21-07-05                                    35
 
−
 
 
−
Reinsurers’ risk management
 
−
      Scope :                             Underwriting
 
−
          Long term survival of
 
−
            the reinsurance
 
−
            company
 
−
      Underwriting and                      Risk
 
−
                                          Management
 
−
      investment risks are
 
−
      aligned with capital        Capital        Asset
 
−
      available (R.B.C)          management      management
 
−
Cairo 20 & 21-07-05                                      36
 
−
 
 
−
      Risk modelling
 
−
                                  Exchange
 
−
                Stock markets    rates            Tsunami
 
−
Interest                                                        Earthquakes
 
−
rates
 
−
                Insurance risk    Credit risk        Market risk
 
−
Inflation                      Operational risk                  Influenza
 
−
                                                                  epidemic
 
−
                  Credit risks                  Tropical
 
−
                                                cyclones
 
−
      Cairo 20 & 21-07-05                                            37
 
−
 
 
−
    Diversification across time
 
−
                                              Less expensive
 
−
                            Lower capital    reinsurance cover
 
−
    Better                      need
 
−
diversification                  or
 
−
                            Lower Cost        Higher level of
 
−
                        given the exposure Protection _ given the
 
−
                                                level of capital
 
−
    Cairo 20 & 21-07-05                                      38
 
−
 
 
−
Retakafuls’ duties
 
−
      Providers of secure covers
 
−
                     Strong capital base
 
−
                     Focus on Risk Management models
 
−
                     Diversification across time
 
−
      Expertise providers
 
−
                     Product development
 
−
                     Pricing
 
−
                     Underwriting
 
−
                     Claims management
 
−
Cairo 20 & 21-07-05                                  39
 
−
 
 
−
Overview
 
−
      Introduction
 
−
      Achievements
 
−
      Challenges ahead
 
−
      Strategy
 
−
      Conclusion
 
−
Cairo 20 & 21-07-05    40
 
−
 
 
−
Strategy – 1st step -
 
−
      Establish an annual meeting of ArabTakafuls
 
−
      and Retakafuls
 
−
                     Networking benefits
 
−
      Set up a « Takaful Association »
 
−
                     Practitioners’ intelligence networks
 
−
                     Best practices’ exchange
 
−
                     Reinsurance placing facilities
 
−
      Set up an informative Takaful & Retakaful
 
−
      website
 
−
                     Wise information exchange among members
 
−
Cairo 20 & 21-07-05                                          41
 
−
 
 
−
Strategy – 2nd step -
 
−
      More and more cooperation between
 
−
      Takafuls
 
−
      Web site becomes transactional
 
−
      « Takaful Association » is efficient
 
−
                     Improved structures
 
−
                     Successful Annual Meeting
 
−
      New well rated Retakafuls are set up
 
−
                     2 to 3
 
−
Cairo 20 & 21-07-05                            42
 
−
 
 
−
Strategy – 3rd step -
 
−
      Design a framework of cooperation with
 
−
      conventional reinsurers
 
−
                     Associate members’ status
 
−
                     Interested in the Takaful market development
 
−
      Set up a brokerage company focused
 
−
      on Retakaful placing
 
−
                     By the Association
 
−
Cairo 20 & 21-07-05                                                43
 
−
 
 
−
Specific position of Middle East
 
−
      Homogenious religious status
 
−
      Oil producer countries generating
 
−
      financial surplus
 
−
      Eligible to play a major role in this
 
−
      strategy
 
−
      Strategy could benefit from the financial
 
−
      synergy existing in Dubai & Bahrain
 
−
Cairo 20 & 21-07-05                          44
 
−
 
 
−
Overview
 
−
      Introduction
 
−
      Achievements
 
−
      Challenges ahead
 
−
      Strategy
 
−
      Conclusion
 
−
Cairo 20 & 21-07-05    45
 
−
 
 
−
Conclusion
 
−
      To be or not to be?
 
−
                     Is no longer the question
 
−
      Other questions prevail now
 
−
                     How many?
 
−
                     How much strong? Capital, rating?
 
−
                     How much knowledgeable?
 
−
      Successful answers to those questions
 
−
      will involve a virtuous business cycle
 
−
                     Takaful & Retakaful development
 
−
                     Benefits for overall economy and society
 
−
Cairo 20 & 21-07-05                                            46
 
−
 
 
−
Retakaful &Takaful’s virtuous cycle
 
−
                    Less expensive takaful products
 
−
                            Higher profitability
 
−
                                Retakaful        Lower cost
 
−
  Enhanced Stronger                                          Secure
 
−
  insurability growth                            of capital industry
 
−
                            Takaful Company
 
−
                            Overall economy
 
−
Cairo 20 & 21-07-05                                                    47
 
−
 
 
−
    Thank you
 
−
                            Sources
 
−
              Islamic Insurance Conference, London,
 
−
                          Sept. 26-27, 2003
 
−
                Swiss Re, Understanding reinsurance,
 
−
                                  2004
 
−
                    Swiss Re, sigma N°6/ 2002.
 
−
Farid Benbouzid            Cairo 20 & 21-07-05      48
 

Latest revision as of 15:29, 8 November 2017


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enrichment 9 faith 9 intellect 9 posterity 9 wealth 9 development 8 maqasid 6 aql 5 education 5 freedom 5 nasl 5 shariah 5 social 5 employment 4 moral 4 nafs 4 solidarity 4 din 3 equitable 3 falah 3 mal 3 political 3 removal 3 research 3 security 3 trust 3 vision 3 vol 3


DOCUMENT KEY POINTS

  • the islamic vision of development in the light of maqasid al shariah m
  • umer chapra research adviser irti idb
  • are these maqasid independent of each other or are they interdependent a c the human self pv a a a c faith rf a a a c intellect y a a a c posterity yiv a a a c wealth a aa x a a
  • do we just safeguard or do we go beyond this to enrich and strengthen
  • figure enrichment of faith worldview tawh d khilafah ris lah and khirah values education rules of proper motivation moral as well as behaviour material justice freedom security of life property and honour honesty removal of poverty equitable family integrity fulfillment of all socioneed fulfilment of all distribution social solidarity economic and political employment and human and political obligations patience self employment brotherhood stability thriftners prudence opportunities tolerance mutual care and trust etc
  • good governance enrichment of self intellect and posterity well being of all fal h


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AlHuda Material\takaful


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DOCUMENT REFERENCES

Number of Pages

11


Published Date

2010-05-29 17:59:05


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