Takaful

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Takaful with Reinsurance focus
Mendoza, 17-22 april 2004
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Summary

• Takaful Best Re
• Takaful in the world
• Outlook

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• Takaful Best Re
• Takaful in the world
• Outlook

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TAKAFUL

• Arabic word,
• Guaranteeing each other or joint guarantee,
• A growing part of the insurance business in the
  muslim world.

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TAKAFUL MAIN PRINCIPLES

• Policy holders co-operate among themselves for
  their common good (Takaful),
• Every policyholder (participant) pays his premium
  (contribution ) to help those, inside the covered
  community, that need assistance,
• Profits and losses are divided according to the
  community pooling system (mudharaba system),

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TAKAFUL MAIN PRINCIPLES

• Uncertainty is eliminated in respect of
  subscription and compensation (tabarru system),
• Social involvement
• Low income individuals protection
• Charitable works, education, training.

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TAKAFUL MODEL

• Basic fundamentals are similar to Cooperative and
  Mutual principles,
• The cooperative and mutual model is the only
  insurance model that is accepted under Islamic
  Law.

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BEST RE

• Retakaful Company,
• Recognized as such worldwide,
• Dedicated to emerging markets,
• Reinsurance business with Takaful, Mutuals,
  Cooperative and Conventional companies.

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ACCEPTED TAKAFUL BUSINESS

• 2003 Premium Income USD 8 Millions
• Share of the whole portfolio 13
• No. of serviced Takaful markets 16
• No. of Takaful cedants 28

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• Takaful Best Re
• Takaful in the world
• Outlook

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TAKAFUL IN THE WORLD

• 2001 World Estimated Premium Income USD
  2.4 Trillions
• 2002 Takaful Estimated Premium Income
  USD 2.1 Billions
• Number of companies 59
• Number of countries 23

(1) Swiss Re, sigma N6/ 2002 (2) Islamic
Insurance Conference, London, Sept. 26-27, 2003
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TAKAFUL IN THE EMERGING MARKETS

• 2002 Takaful Estimated Premium Income USD
  2 Billions
• Share of WW Takaful Premium Income
  99
• Emerging Markets Total Premium Income
  USD 217 billions
• Number of Companies 45

(1) Swiss Re, sigma N6/ 2002 (2) Islamic
Insurance Conference, London, Sept. 26-27, 2003
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GEOGRAPHICAL SPREAD
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• Takaful Best Re
• Takaful in the world
• Outlook

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Non LIFE INSURANCE DEMAND IN THE EMERGING MARKETS

• Premium as of GDP
• Minimum 0.2 (Bangladesh)
• Maximum 2.9 (Jamaica, South Africa)
• Per-Capita Spending
• Minimum USD 8 (Africa)
• Maximum USD 54 (Latin America)

Largely untapped potential
Swiss Re, sigma N6/ 2002
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LIFE INSURANCE DEMAND IN THE EMERGING MARKETS

• Premium as of GDP
• Minimum 0 (Saudi Arabia)
• Maximum 3.8 (Trinidad Tobago)
• Per - Capita Spending
• Minimum USD 14 (Middle East)
• Maximum USD 30 (South East Asia)

Largely untapped potential
Swiss Re, sigma N6/ 2002
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AN ANSWER TO AN UNFULFILLED DEMAND

• Takaful is an alternative to conventional
  insurance,
• Already helped capture a part of this potential,

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GROWTH FORECAST

• High growth trend in South East Asia
• likely to continue
• 30 per year in Malaysia
• New markets likely to introduce Takaful in the
  near future
• Philippines,
• Bangladesh,
• Former Soviet Union States,
• Nigeria,
• South Africa

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GROWTH FORECAST

• More and more Takaful windows are set up by
  conventional insurers,
• Sustained double digit average annual growth,
• Assuming a 15 per year average growth, in the
  coming years, would not be unreasonable.

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RETAKAFUL SUPPLY

• Takaful operators, as all new companies, rely
  heavily on reinsurance,
• There are very few Retakaful Companies (2 or 3
  worldwide),

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RETAKAFUL

• Takaful companies should revert first to
  mutuality and cooperative operators,
• They then can work with conventional insurance
  and reinsurance market.

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BEST RES TAKAFUL TARGET

• Support the development of the existing Takaful
  industry,
• Participate in the establishment of new Takaful
  companies throughout the emerging market,
• Promote the joint cooperation of Takafuls with
  the close Mutual and Cooperative movement through
  ICMIF.

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Takaful with Reinsurance focus
Mendoza, 17-22 april 2004