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Calculated Risks, Measurable
 
Results
 
  
Sylvain Goulet, fcia, fsa
 
Developing New Risks,
 
Developing New Solutions
 
  
New Reinsurance Solutions
 
  • 1 - Retakaful
 
    – From “Takaful” or Shari’ah compliant
 
      insurance
 
    – How can reinsurance help?
 
  • Traditional Risks, New Reinsurance
 
    – 2 - Increasing client retention
 
    – 3 - Vary Reinsurance portions (e.g. CI
 
      products)
 
    – 4 - Reinsurance derivatives
 
  
New Reinsurance Solutions
+
== Top 20 FREQUENT WORDS ==
  • New Insurance Risks, New
+
reinsurance 18
    Reinsurance Solutions?
+
insurance 15
    – 5 - Avian Inluenza / Pandemic Risk
+
takaful 15
 +
retention 11
 +
amount 10
 +
risk 10
 +
shari 9
 +
derivatives 8
 +
increasing 8
 +
pandemic 8
 +
avian 7
 +
client 7
 +
influenza 7
 +
cedant 6
 +
costs 6
 +
mortality 6
 +
deaths 5
 +
gains 5
 +
potential 5
 +
reinsurer 5
 +
risks 5
 +
solutions 5
  
1 - Takaful Insurance - Potential
 
  • Muslim Population
 
    – Between 1/5 and 1/4 of the world
 
      population
 
    – Mainly Asia, Africa and Middle East
 
    – About 1.6 million Muslims in Canada (5%)
 
    – About 3.0 million Muslims in the USA (1%)
 
  • Growth
 
    – One of the fastest growing segments in
 
      North America, particularly Canada
 
  
1 - Takaful Insurance
 
  • Insurance in Compliance with Shari’ah
 
    Law (Islam)
 
  • Shari’ah Law
 
      – Legal framework based on Muslim
 
        principles of jurisprudence
 
      – Legal theory established before the 19th
 
        century, or
 
      – Changing body and reflect current politics
 
        and economic realities
 
  
1 - Takaful Insurance
+
== DOCUMENT KEY POINTS ==
  • Insurance that is permissible under
+
*new reinsurance solutions a c retakaful a from takaful or shari ah compliant insurance a how can reinsurance help a c traditional risks new reinsurance a increasing client retention a vary reinsurance portions e
    Shari’ah Law
+
*ci products a reinsurance derivatives
  • Takaful
 
      – Arabic word: “joint guarantee” or
 
        “guarantee each other”
 
      – Although “insurance” is technically
 
        forbidden because it includes uncertainty,
 
        “mutual cooperation” and “pool
 
        contributions” are allowed for mutual
 
        benefits
 
  
1 - Takaful Insurance
+
*million muslims in the usa a c growth a one of the fastest growing segments in north america particularly canada
  • Non-Permissible Elements
+
*takaful insurance potential a c muslim population a between and of the world population a mainly asia africa and middle east a about
    – Uncertainty (“Gharar”): timing of payment,
 
      amount, or whether made or not
 
    – Gambling (“Maisir”): premiums could be
 
      seen as small when compared to the
 
      potential payout
 
    – Usury (“Riba”): not permitted under
 
      Shari’ah Law (note: does not contradict
 
      profits & capital gains)
 
  
1 - Takaful Insurance
+
*takaful insurance a c some structural solutions a uncertainty gharar ensure that some payments are made in one form or another a gambling maisir factor in some guarantees return of premiums participation in profits etc
  • Some Structural Solutions
+
*a usury riba use shari ah compliant funds increasingly available
    – Uncertainty (“Gharar”): ensure that some
 
      payments are made in one form or another
 
    – Gambling (“Maisir”): factor in some
 
      guarantees, Return of Premiums,
 
      participation in profits, etc.
 
    – Usury (“Riba”): use Shari’ah compliant
 
      funds (increasingly available)
 
  
1 - Takaful Insurance
+
*increasing client s retention a c increasing client s retention a by calendar year built in annual recapture a reduce reinsurance costs a increase the partnership between the ceding co
  • Other Characteristics of Takaful
+
*and the reinsurer
    – Must have a Shari’ah Board to uphold
 
      Islamic Law, and connection with an
 
      external Islamic Institute
 
    – Full disclosure of contract terms and profits
 
      distribution between the participants and
 
      the “Operator”
 
    – Reinsure with a Retakaful if available
 
    – “Window Operations” may be permitted
 
  
1 - Takaful Insurance - Potential
+
*avian influenza pandemic risk a c mortality losses a however an avian influenza pandemic could easily eliminate mortality gains a a gamble the two risks are essentially different a c normal day to day mortality improving chances slow process or a c abnormal spike in death rates that last years spanish flu in million deaths in countries incl
                  Potential Takaful Distribution
+
*americans that s a death rate or in
                                    Malaysi
 
                                      a           Pakista    Singapor
 
                                                    n            e
 
      Indonesi                                                  Thailand
 
        a                                                       1% Sri Lanka
 
                                                                          0%
 
                                                                        Bahrain
 
                                                                          1%
 
                                                                        Jorda
 
                                                                          n
 
                                                                        Kuwait
 
                                                                            3%
 
                                                                          Oma
 
                                                                            n
 
                                                                          Qata
 
                                                                            r
 
                                                        Saudi Arabia
 
            Bangladesh      United                      17%
 
                6%      Yemen                Syria
 
                              Arab          3%
 
                        0%
 
                              Emirate
 
  
1 - Takaful Insurance - Wakalah Model
 
1 - Takaful Insurance - Mudharabah
 
1 - Takaful Insurance - Potential
 
  • Opportunities for Reinsurance
 
    – Takaful has been small but growing rapidly
 
      abroad
 
    – Growing demand because of “Shari’ah
 
      compliance” and increasing wealth
 
    – If Retakaful is available, then must use it
 
    – Retakaful has been almost non-existent,
 
      and therefore limiting the growth of Takaful
 
    – Canadian banks and credit unions already
 
      working on Shari’ah-compliant investments
 
  
Traditional Risks,
+
''Please note, This is an auto generated summary based on sentances position in the document and other factors''
New Solutions
+
== DOCUMENT WORD ANALYSIS ==
 +
=== Main Category ===
 +
: AlHuda Material\takaful
  
2 -Increasing Client’s Retention
 
  • Increasing Client’s Retention
 
      – By calendar year (built-in annual
 
        recapture)
 
      – Reduce reinsurance costs
 
      – Increase the partnership between the
 
        ceding co. and the reinsurer
 
  
2 -Increasing Client’s Retention
+
=== KeyWords ===
                                2,200
+
taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme
                                            Traditional Net Amount at Risk "A"
 
                                2,000
 
                                1,800
 
                                1,600
 
  Funds & Face Amount ($000)
 
                                1,400
 
                                1,200
 
                                1,000
 
                                800
 
                                600
 
                                400                                            Ceded Amount
 
                                                                                Cedant Retention
 
                                200                                            Fund
 
                                  0
 
                                        50  55  60  65  70  75  80  85    90      95
 
  
2 -Increasing Client’s Retention
 
                                2,200
 
                                            Projection of Net Amount at Risk "A"
 
                                2,000
 
                                1,800
 
                                1,600
 
  Funds & Face Amount ($000)
 
                                1,400
 
                                1,200
 
                                1,000
 
                                800
 
                                600
 
                                400                                              Ceded Amount
 
                                                                                  Cedant Retention
 
                                200                                              Fund
 
                                  0
 
                                        50    55  60  65  70  75  80  85    90      95
 
  
2 -Increasing Client’s Retention
 
                                    4,500
 
                                                Projection of Net Amount at Risk "B"
 
                                    4,000
 
                                    3,500
 
  Funds & Face Amount ($000,000)
 
                                    3,000
 
                                    2,500
 
                                    2,000
 
                                    1,500
 
                                    1,000
 
                                                                                      Ceded Amount
 
                                                                                      Cedant Retention
 
                                    500                                              Fund
 
                                      0
 
                                            50    55  60  65  70  75  80  85  90      95
 
  
2 -Increasing Client’s Retention
+
== RELATED DOCUMENTS ==
  • For the Cedant:
+
:[[A Review of Takaful by Prof. Khawaja Ahmed Saeed]]
    – Reduce reinsurance costs
+
:[[Agency Management,Training and Incentive Programme]]
    – Retain participation in future mortality
+
:[[Audit Issue of Islamic Banking]]
      gains
+
:[[Banca Takaful by Faisal Shahzad Abbassi]]
  • For the Reinsurer
+
:[[Best Practices from e- Insurance to e-Takaful by Sami Guello]]
    Increase the commitment of the reinsurer
+
:[[Calculated Risks, Measurable Results]]
      towards the cedant over the long-term
+
:[[Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz ]]
 +
:[[Co-Operative Insurance and Takaful]]
 +
:[[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]]
  
3 - Vary Reinsurance Portions
 
  • For Example: Critical Illness
 
    – Reduce reinsurance costs
 
        • Higher incidence, more predictable costs
 
          (Heart Attack, Stroke, Cancer)
 
        • Cedant could retain more
 
    – Reduce uncertainty
 
        • Lower incidence, more variable costs
 
          (Alzheimer’s disease, Renal disease,
 
          Parkinson’s disease)
 
  
3 - Vary Reinsurance Portions
 
3 - Vary Reinsurance Portions
 
  • For Example: Critical Illness
 
    – Could migrate to the same basis over time
 
      (10 years)
 
        • Can afford more risk over time
 
        • Create more harmonization over time
 
        • Develop more company experience
 
  
3 - Vary Reinsurance Portions
+
== DOCUMENT REFERENCES ==
4 - Reinsurance Derivatives
 
  • Derivatives - Oxford:
 
      – (of a financial product) having a value
 
        deriving from an underlying variable asset :
 
        equity-based derivative products
 
      – (often derivatives) an arrangement or
 
        instrument (such as a future, option, or
 
        warrant) whose value derives from and is
 
        dependent on the value of an underlying
 
        asset
 
  • “Reinsurance” is a derivative
 
  
4 - Reinsurance Derivatives
 
          Insurer “A”                        Insurer “B”
 
        Reinsures with                    Reinsures with
 
      “R” Positive CFs                  “R” Negative CFs
 
              Reinsurer “R” mixes CFs from “A”
 
                & “B”, optimizes ALM, and return
 
                    better derivatives in costs
 
                Reinsurer “R” retains profit as well
 
  
4 - Reinsurance Derivatives
+
=== Number of Pages ===
  • Any Other Ideas of Reinsurance
+
34
    Derivatives:
 
    – Designed for Capital Efficiency
 
    – To optimize buying power
 
    – Use of captive capital markets (off-shore)
 
    – Etc.
 
  
New Insurance Risks,
 
New Reinsurance Solutions
 
  
5 - Avian Influenza / Pandemic Risk
+
=== Published Date ===
  • pan=all / demos=people
+
2016-09-17 01:17:29
  • Past Pandemics
 
      – Spanish Flu in 1918-19: ~40 m deaths
 
      – Asian Flu 1957: 1 million deaths
 
      – Hong Kong Flu 1968: 700,000 deaths
 
  • SARS
 
      – 8,098 people infected in 25 countries
 
      – 774 deaths
 
      – Large economic impact
 
  
5 - Avian Influenza / Pandemic Risk
 
  • 3 Conditions for a Pandemic
 
      – A new influenza virus for which there is no
 
        immunity among people
 
      – It must infect humans and cause illness
 
      – It must spread easily and be sustainable
 
        among humans
 
  
5 - Avian Influenza / Pandemic Risk
+
== Full Document ==
  • Mortality Gains
 
    – With possible cure of cancer and other
 
      critical illnesses, life expectancy could
 
      reach 120 years or more
 
    – Reinsurers can potentially realize huge
 
      mortality gains by deferral of payment or
 
      lapses
 
    – Huge asset base (reserves) on which to
 
      earn investment income
 
  
5 - Avian Influenza / Pandemic Risk
 
  • Mortality Losses
 
    – However, an Avian Influenza / Pandemic
 
      could easily eliminate mortality gains
 
    – A Gamble? The two risks are essentially
 
      different:
 
        • “Normal” day-to-day mortality, improving
 
          chances, slow process, or
 
        • “Abnormal” spike in death rates that last 2-3
 
          years (Spanish Flu in 1918-19:~40 million
 
          deaths in 60 countries, incl. 700,000
 
          Americans - that’s a 7/1000 death rate, or 1 in
 
          150!)
 
  
5 - Avian Influenza / Pandemic Risk
+
[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/Takaful/Calculated%20Risks,%20Measurable%20Results.pdf Read the Full Document]
  • Because of lower financial resources,
 
    low to medium income may be more
 
    affected
 
      – Smaller life insurance policies
 
      – Significant portion below retention
 
  • Can it be reinsured?
 
      – Much like “catastrophe” risks
 
  
THANK YOU !
+
 
 +
[[Category:Islamic Finance]]
 +
 
 +
[[Category: Takaful]]

Latest revision as of 07:31, 11 November 2017


Top 20 FREQUENT WORDS

reinsurance 18 insurance 15 takaful 15 retention 11 amount 10 risk 10 shari 9 derivatives 8 increasing 8 pandemic 8 avian 7 client 7 influenza 7 cedant 6 costs 6 mortality 6 deaths 5 gains 5 potential 5 reinsurer 5 risks 5 solutions 5


DOCUMENT KEY POINTS

  • new reinsurance solutions a c retakaful a from takaful or shari ah compliant insurance a how can reinsurance help a c traditional risks new reinsurance a increasing client retention a vary reinsurance portions e
  • ci products a reinsurance derivatives
  • million muslims in the usa a c growth a one of the fastest growing segments in north america particularly canada
  • takaful insurance potential a c muslim population a between and of the world population a mainly asia africa and middle east a about
  • takaful insurance a c some structural solutions a uncertainty gharar ensure that some payments are made in one form or another a gambling maisir factor in some guarantees return of premiums participation in profits etc
  • a usury riba use shari ah compliant funds increasingly available
  • increasing client s retention a c increasing client s retention a by calendar year built in annual recapture a reduce reinsurance costs a increase the partnership between the ceding co
  • and the reinsurer
  • avian influenza pandemic risk a c mortality losses a however an avian influenza pandemic could easily eliminate mortality gains a a gamble the two risks are essentially different a c normal day to day mortality improving chances slow process or a c abnormal spike in death rates that last years spanish flu in million deaths in countries incl
  • americans that s a death rate or in


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


RELATED DOCUMENTS

A Review of Takaful by Prof. Khawaja Ahmed Saeed
Agency Management,Training and Incentive Programme
Audit Issue of Islamic Banking
Banca Takaful by Faisal Shahzad Abbassi
Best Practices from e- Insurance to e-Takaful by Sami Guello
Calculated Risks, Measurable Results
Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz
Co-Operative Insurance and Takaful
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


DOCUMENT REFERENCES

Number of Pages

34


Published Date

2016-09-17 01:17:29


Full Document

Read the Full Document