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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


Top 20 FREQUENT WORDS

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


Please note, This is an auto generated summary based on sentances position in the document and other factors

DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\takaful


KeyWords

taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme


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DOCUMENT REFERENCES

Number of Pages

11


Published Date

2010-05-29 17:59:05


Full Document

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