The World Islamic Insurance Directory 2013, jointly published by Takaful Re and the Middle East Insurance Review, provided a snapshot of the global Takaful scene, with an insight into financial and management data of Takaful and re-Takaful operators in key markets.
The World Takaful Exhibition, which was held along the sidelines of the conference, showcased the latest products, services and innovations from over 35 international exhibitors.
“As the Takaful industry continues to grow by leaps and bounds and as the future of this vibrant segment remains full of promising opportunities, the industry must unite its efforts and work together by all means possible to leverage on these growth prospects and raise the bar on the Takaful segment. To help maintain this momentum and the excellent growth rate for years to come, the industry must follow a three-step process. First, we need to stress on the immense benefits of adopting Takaful-based products and services, while also sparing no group efforts to promote underwriting capabilities. Strong foundations and groundwork for positioning Takaful as a key strategic insurance solution has already been laid. All that is left to do is to maintain and reinforce these foundations. Secondly, the industry needs to raise more awareness and tap into newer markets in order to attract potential clients and introducing these concepts to new customers will certainly be a significant and positive influence on the process. Last but not least, the third point is to make more investments into research and development. The industry needs to understand what is going through the clients’ minds and try to learn, study and fully comprehend their needs and requirements. Doing so will assist in the development of new and more beneficial solutions that cater to the needs of the customer,” Hussein Al Meeza, Managing Director and Chief Executive Officer, Dubai Islamic Insurance and Reinsurance Company (AMAN), said.
“The Takaful industry has witnessed tremendous growth and strong performance, experiencing a compound average growth rate of about 20% percent in terms of contributions over the last few years. The strong growth momentum is expected to continue, underpinned by the rising affluence of key markets amidst strong economic fundamentals and, given the large untapped market that still exists, the global Takaful industry is poised to benefit further in the years ahead. However the increasing competitive pressures faced by the industry pose significant challenges. In order to ensure that the industry realizes it full growth potential, it is essential to improve competitive performance and shift to sound underwriting profitability,” Dr. Saleh Malaikah; Chairman of Rusd International Holding Group; Vice Chairman and Chief Executive Officer of Salama Group, said.
“Salama was once again delighted to be supporting the World Takaful Conference and we believe that this event will be an ideal opportunity to discuss some of the critical challenges and opportunities facing the industry.”
The Global Family Takaful Report, developed by Milliman, provided research insights into the performance of Family Takaful offerings, the future direction of the market and new opportunities for the growth of Family Takaful across key international markets. With a principal focus on “Industry Growth and Unfolding Family Takaful Potential” the Report noted that Family Takaful accounted for just less than 20% of the global Takaful gross written premiums in 2011. The Report also noted that with bottom-line profitability on the general Takaful front facing stiff competition from a relatively soft market, family Takaful is seen as a long-term and sustainable proposition with strong bottom-line expectations.
According to the Report, though the challenges of matching the long-term liability profile of family Takaful with similar duration Shari’ah-compliant assets remain, higher profit margins and the potential for surplus sharing make family Takaful a more viable long-term proposition and ideally placed to meet the ‘spiritual’ dimensions of Takaful.
According to the Report, the global family Takaful gross contributions in 2011 are estimated to be $2.12 billion, 16% higher than 2010 and have increased at a compounded annual growth rate (CAGR) of 32% (2007-2011). The Report indicated that the highest growth continues to come from South East Asia and Indonesia in particular, while the Middle East and Africa regions do not seem to be capitalising on family Takaful global growth, mainly due to regulatory uncertainty. The Milliman Global Family Takaful Report 2013 also noted that in 2011, South East Asia contributed about 78% of global contributions, followed by the Middle East and Africa at 20% and South Asia at 2% in terms of family Takaful.