GLOBAL TAKAFUL GROUP

Mutual Insurance and Takaful in a Changing World

Istanbul, Nov 12-13

By Chakib Abouzaid

Mutual Insurance and Takaful in a Changing World Istanbul, Nov 12-13

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Who is the ceding party ?

The participants” pool ?

or

The Takaful operator ?

What level of pooling is appropriate ?

Challenges for Retakaful operators

Retakaful

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%

US$ Million

2010

Capital GWC Earned Net

Profit

ROE Rating Retention Treaty

capacity

Takaful

model

Wakala

Status

BEST RE (L)

Ltd.

USD 140 M USD

444.8 M

USD 369.1 M USD

0.367 M

AB++ (.M. Best)

‘AA’ (MARC)

???(S&P)

Property :

Prop : USD 6 M

N- P : USD 4 M

Marine :

Prop : USD 2.5 M

N-P : USD 2.5 M

FAC 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

Hanover

Retakaful

ACR MEA

ACR SEA

(2009)

Al Fajer

Africa Re

Labuan Re

(2009)

5 5

MNRB

Takaful

Treaty Takaful

Coz Fac on Halal

risks from

conventional

Tokio

Marine

Takaful Re

Ranking

8

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?

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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....

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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?

•

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