Mutual Insurance and Takaful in a Changing World

Report
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
Mutual Insurance and Takaful in a Changing World
Istanbul, Nov 12-13
2
Takaful Market Development
2012
2011
2010
2009
2008
2007
30%
Growth
22%
Growth
18%
Growth
23%
Growth
20%
Growth
20%
Growth
Takaful Market Development
8,000.0
7,000.0
6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
2005
Africa
2006
2007
East Indian Sub-Continent
2008
Far East
2009 est
GCC
2010 est.
Levant
2011 est.
2012 est.
Middle East (Non Arab)
Takaful Contributions vs.
Conventional premium in MENA
Total Gross Premium Income
Country
2006
Bahrain
Takaful
2007
2008
2009
2010
Growth Rate
313.5
371.7
495.2
532.1
574.3
7.9%
33.7
40.7
70.9
86.6
102.2
18.0%
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
571.6
549.6
641.3
568.9
718.0
26.2%
90.0
95.0
100.7
127.7
133.1
4.2%
47.2
50.0
62.7
72.7
N/A
N/A
2.1
5.4
Egypt
Takaful
Takaful
Palestine
Takaful
Qatar
-
Takaful
Saudi Arabia
Sudan (*)
U.A.E.
Takaful
(*)
-
7.9
1,021.0
861.1
855.6
781.6
50.0
52.6
128.1
136.1
259.8
90.9%
1,852.3
2,290.3
2,911.7
3,896.0
4,370.0
12.2%
243.7
261.6
278.1
285.9
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%
(*) KSA and Sudan are fully cooperative
N/A
46.3%
N/A
-
2.8%
Takaful Growth vs. Conventional in MENA
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
91%
90%
44%
43%
28%
26%
18%
8%
4%
12%
12% 12%
4%
N/A
Conventional
N/A
Takaful
10%
3% 3%
Number of Islamic Insurance operators in 2010
US$ Million
2010
Capital
GWC
Earned
Net
Profit
BEST RE (L)
Ltd.
USD 140 M
USD
444.8 M
USD 369.1 M
USD
0.367 M
BEST RE
Family 2010
10 US$
2,937
2,679
0,146
1,44
same
99,2%
Saudi Re
267
42.56
14.63
(9.15)
(3.69)
BBB+
57%
8
3
Hanover
Retakaful
53 paid
132.5Aut
79.5
70.5
13
17
A
Group AA-
98%
32
ACR MEA
ACR SEA
(2009)
200
100
A-
76%
Al Fajer
188
n/a
B++
AM Best
12
Start
up
AGroup
Africa Re
Labuan Re
(2009)
150 Paid
MNRB
Takaful
32.8 paid
164 Aut.
ROE
2.09
Retention
AB++ (.M. Best)
‘AA’ (MARC)
???(S&P)
44.3
8.26
Rating
(-0.5)
BBB+
Fitch
Takaful
model
Wakala
Status
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
1m US$
WAKALA
Not restricted to
Takaful Co’s only
Cooperative
15 – 25%
Takaful only
5-15
5-10
7.5 to 14%
Takaful
Not advised
5
5
25%
Takaful Window
Wakala
84.2
Treaty Takaful
Coz Fac on Halal
risks from
conventional
3
Not advised
Family Takaful
exclusively
8
Tokio
Marine
17 paid
170 Aut.
Takaful Re
125 paid
500 Aut.
40.05
33,99
(3.4)
(2.6)
BBB
94 %
5
6
4
4
4
3
9
3
5
Ranking
Conventional
+
Takaful
Takaful Widow
AM Best A-
18.6
Treaty
capacity
AA
5 to 12.5%
Takaful only
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....
9
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?
•
10
Thank you

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