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GLOBAL TAKAFUL GROUP. Mutual Insurance and Takaful in a Changing World. By Chakib Abouzaid. Istanbul, Nov 12-13. Retakaful. Who is the ceding party ? The participants” pool ? or The Takaful operator ? What level of pooling is appropriate ? Challenges for Retakaful operators. - PowerPoint PPT PresentationTRANSCRIPT
GLOBAL TAKAFUL GROUP
Mutual Insurance and Takaful in a Changing World
Istanbul, Nov 12-13
By Chakib Abouzaid
2Mutual Insurance and Takaful in a Changing World Istanbul, Nov 12-13
Who is the ceding party ? The participants” pool ?
or
The Takaful operator ?
What level of pooling is appropriate ?
Challenges for Retakaful operators
Retakaful
30% Growth
2008
2009
Takaful Market Development
2007
20% Growth
22% Growt
h
18% Growt
h
23% Growt
h
2010
2012201
1 20% Growth
2005 2006 2007 2008 2009 est 2010 est. 2011 est. 2012 est. -
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
Africa East Indian Sub-Continent Far EastGCC Levant Middle East (Non Arab)
Takaful Market Development
Country
Total Gross Premium Income
2006 2007 2008 2009 2010 Growth Rate Bahrain Takaful
313.5 371.7 495.2 532.1 574.3 7.9% 33.7 40.7 70.9 86.6 102.2 18.0%
Egypt Takaful
861.5 1,088.3 1,392.6 1,567.1 1,627.9 3.9% 4.7 6.1 6.2 29.3 41.9 43.0%
Jordan Takaful
377.3 427.0 487.0 527.6 589.3 11.7% 11.4 14.2 21.9 24.2 45.9 89.7%
Kuwait Takaful
571.6 549.6 641.3 568.9 718.0 26.2% 90.0 95.0 100.7 127.7 133.1 4.2%
Palestine Takaful
47.2 50.0 62.7 72.7 N/A N/A - - 2.1 5.4 7.9 46.3%
Qatar Takaful
1,021.0 861.1 855.6 781.6 N/A N/A 50.0 52.6 128.1 136.1 259.8 90.9%
Saudi Arabia (*) 1,852.3 2,290.3 2,911.7 3,896.0 4,370.0 12.2% Sudan (*) 243.7 261.6 278.1 285.9 - 2.8% U.A.E. Takaful
2,807.7 3,895.8 4,974.6 5,455.5 6,003.6 10.0% 65.0 369.2 542.1 639.6 818.4 28.0%
Takaful Contributions vs. Conventional premium in MENA
(*) KSA and Sudan are fully cooperative
Takaful Growth vs. Conventional in MENA
Bahra
inEg
ypt
Jorda
nKu
wait
Pales
tine
Qatar
Saud
iSu
dan
UAE0%
10%20%30%40%50%60%70%80%90%
100%
8% 4%12%
26%
N/A N/A12%
3%10%
18%
43%
90%
4%
44%
91%
12%3%
28%
Conventional Takaful
Number of Islamic Insurance operators in 2010
US$ Million2010
Capital GWC Earned NetProfit
ROE Rating Retention Treatycapacity
Takaful modelWakala
Status
BEST RE (L) Ltd.
USD 140 M USD 444.8 M
USD 369.1 M USD0.367 M
AB++ (.M. Best) ‘AA’ (MARC)
???(S&P)
Property :Prop : USD 6 MN- P : USD 4 MMarine :Prop : USD 2.5 MN-P : USD 2.5 MFAC Property : USD 18 M SI
Wakala for operations & Mudharaba for investments
Not restricted to Takaful Co.'s only
BEST RE Family 2010
10 US$ 2,937 2,679 0,146 1,44 same 99,2% 1m US$ WAKALA Not restricted to Takaful Co’s only
Saudi Re 267 42.56 14.63 (9.15) (3.69) BBB+ 57% 8 3
Cooperative
Hanover Retakaful
53 paid132.5Aut
79.5 70.5 13 17 AGroup AA-
98% 32 15 – 25%Takaful only
ACR MEAACR SEA (2009)
200100
44.3 A- 76% 5-155-10
7.5 to 14%Takaful
Al Fajer 188 n/a B++AM Best
Not advised
Conventional +
TakafulAfrica Re 12 Start
upA-
Group Takaful Widow
Labuan Re(2009)
150 Paid 8.26 2.09 (-0.5) AM Best A- 5 5
25%
WakalaTakaful Window
MNRB Takaful
32.8 paid164 Aut.
18.6
Not advised
BBB+Fitch
84.23
Treaty Takaful Coz Fac on Halal
risks from conventional
AAFamily Takaful
exclusivelyTokio Marine
17 paid170 Aut.
Takaful Re 125 paid500 Aut.
40.05 33,99 (3.4) (2.6) BBB 94 % 5 5 to 12.5% Takaful only
Ranking 6 4 4 4 3 9 3 5
8
9
Common questions• What is Retakaful? There is a need to clarify the definition for the non professionals• How much is the volume of Retakaful?• How many operators Retakaful?• How much is their total capacity?• Are they active in all LOB?• Technicalities of Retakaful• What are the main differences between Retakaful & conventional reinsurance?• Is the pricing the same for Retakaful vs. Conventional? Or are there any additional charges to be
loaded to the net contribution?• Who is the ceding party? • The participants” pool? or • The Takaful operator?
• What level of pooling is appropriate? Can the pooling by product? LOB? Or by ceding company? i.e. to consider the company as a pool of policyholders? Is this acceptable? Or is a way to take back the Retakaful to conventional?
• Are the Retakaful companies profitable for their shareholders? If not why?• Are the Retakaful adding a real value to the industry and their ceding company? i.e. product design,
technical support....
10
Challenges and future of Retakaful• Current challenges for Retakaful operators: deficit, volume of
ceded contributions...• What is the missing link today in Takaful?• Considering the volume of Retakaful and deficit issue, are the
current Retakaful models sustainable?• What is the future of existing Retakaful?• Is there a need for more Retakaful capacity? And in which
LOB?•
Thank you