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