Omar Gouda - LONDON – 17 th - 18 th February 2015 RETAKAFUL OPERATORS: Driving For Takaful Growth.

African Retakaful Company

MEMBER OF AFRICA RE GROUP

Omar Gouda - LONDON – 17th - 18th February 2015

RETAKAFUL OPERATORS:Driving For Takaful Growth




General Overview- Global Takaful Market.

Features of Global Takaful Market growth

Takaful growth challenges

How Retakaful Operators can assist Takaful

growth African Retakaful: Africa Re’s response to

Market Challenges




Global Takaful Market:

• Takaful Industry is the youngest and most dynamic

among the Islamic core financial markets.

• Takaful or the Islamic insurance continues to

maintain strong growth momentum • Over 2013 - 2016, The global Takaful market is

expected to grow by minimum of 14% annually.




Features of Global Takaful Market Growth:

Growth, Technical Margins and surpluses prospects for Takaful operators differ significantly from market to market.

Wide deviations of markets in respect of economic conditions, industry, legal, regulatory and operational structures/frameworks.

Intense competition between the Takaful operators within the Takaful Industry, and with the conventional insurers.

Despite the volatility in the financial markets, the global Takaful industry maintained the high growth momentum




Takaful growth challenges:

Despite the relatively high Takaful growth rates, still there are many challenges facing the Takaful Industry:

Low Takaful penetration rates - A common feature of most Takaful markets

Limited of product design, research and development, due to low expenditures on R&D.

Limited market strategies to reach mass markets/customers.




Takaful growth challenges:

Absence of appropriate legal framework in many markets.

Absence of clear operational framework in many markets.

Absence of clear regulator’s frameworks in many markets .

Lack of/weak customer awareness.

Internal Extensive/sever competition between the Takaful Operators

Extensive capacity, and very well capitalized conventional competitors.




• RATAKAFUL IS ESSENTIAL FOR THE SUCCESS OF TAKAFUL




Why there is a need for Retakaful??

Efficiency of risk spread between Takaful/Retakaful FUNDs

Providing capacity to cover Peak risks or hazardous risks.

Technical support:-

A. Risk based pricing

B. Underwriting training and support

C. Product design and refinement

D. Retakaful treaty (contract) wordings

E. Setting up Takaful operations




Why there is a need for Retakaful??

Financial support to the Participant’s funds, and improving

liquidity.

Minimize the effect of Loss Ratio fluctuation by smoothing

results over longer time

Legal requirements, as the Retakaful protection is usually

required for license.

The most important factor is the Shariaa requirements.




How Can Retakaful Operators assist Takaful growth?

Retakaful operators can assist Takaful industry in various ways:

Enhancement of Retakaful Regulators/ or Supervisory Authorities

Takaful and Retakaful Operators share the responsibility of

creation and maintaining good relationship with the Regulators.

Formulation of effective channels of communication with

regulators and deliver any required assistance and supports

needed.

The distributed surplus can maintain a better balanced technical

portfolio of Takaful operators





Assist in the establishment of/supporting educational

institutes/training centers either dedicated solely to Takaful/Retakaful

or as a part of its programs.

Conduct training, workshops, seminars and conferences

Support various efforts and initiatives which can serve Takaful industry

Assist the Takaful’s Industry Federations and Associations.

Technical supports to Takaful companies

Assist in improving the levels of public awareness, which is one of the

main factors affecting the growth of Takaful Industry.





Assist in the standardization; which:

A. reduces transaction costs,

B. improves the awareness of legal rights and

C. minimize the marketability problems across borders.

Encourage and develop the Enterprise Risk management concepts for the

Takaful industry

Enhance the Social Responsibility as a material part of Takaful

concepts.

Enhance the unification of the Takaful modules and Shariaa

concepts across countries.




Africa Retakaful: Response to Market need

Africa Retakaful, (fully owned subsidiary of Africa Re) was set

up in 2010 in Cairo.

Commenced business in 2011 to provide all types of Shariah

compliant products.

As a specialized regional vehicle, it seeks to increase Takaful

awareness in Africa, Asia & M/East.

Fully committed to Takaful industry

Africa Re, rated A- by Standard and Poor’s and AM Best.




Africa Retakaful (Wakala & Mudaraba) models.

The Takaful operations-based on Wakala model with

management expense charged as actual.

No operational profits to be shared by the shareholders

The investment model-the Mudaraba type- shares profit and

loss with participants.

The Retakaful fund is a Shariah compliant equity investment

scheme.




Thank you

Omar Gouda - LONDON – 17 th - 18 th February 2015 RETAKAFUL OPERATORS: Driving For Takaful Growth.

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Transcript of Omar Gouda - LONDON – 17 th - 18 th February 2015 RETAKAFUL OPERATORS: Driving For Takaful Growth.