GLOBAL TAKAFUL GROUP Mutual Insurance and Takaful in a Changing World Istanbul, Nov By Chakib Abouzaid

Mutual Insurance and Takaful in a Changing WorldIstanbul, Nov  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 Takaful Market Development % Growth 22% Growth 18% Growth 23% Growth % Growth

Takaful Market Development

Country Total Gross Premium Income Growth Rate Bahrain Takaful % % Egypt Takaful , , , , % % Jordan Takaful % % Kuwait Takaful % % Palestine Takaful N/A % Qatar Takaful 1, N/A % Saudi Arabia (*) 1, , , , , % Sudan (*) % U.A.E. Takaful 2, , , , , % % Takaful Contributions vs. Conventional premium in MENA (*) KSA and Sudan are fully cooperative

Takaful Growth vs. Conventional in MENA

Number of Islamic Insurance operators in 2010

US$ Million 2010 CapitalGWCEarnedNet Profit ROERatingRetentionTreaty capacity Takaful model Wakala Status BEST RE (L) Ltd. USD 140 M USD M USD M USD 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 US$2,9372,6790,1461,44same99,2%1m US$WAKALA Not restricted to Takaful Co’s only Saudi Re (9.15)(3.69)BBB+57% 8 3 Cooperative Hanover Retakaful 53 paid 132.5Aut A Group AA- 98% 3215 – 25% Takaful only ACR MEA ACR SEA (2009) A-76% to 14% Takaful Al Fajer 188n/aB++ AM Best Not advised Conventional + Takaful Africa Re 12Start up A- Group Takaful Widow Labuan Re (2009) 150 Paid (-0.5)AM Best A % Wakala Takaful Window MNRB Takaful 32.8 paid 164 Aut Not advised BBB+ Fitch Treaty Takaful Coz Fac on Halal risks from conventional AA Family Takaful exclusively Tokio Marine 17 paid 170 Aut. Takaful Re 125 paid 500 Aut ,99(3.4)(2.6)BBB94 % 55 to 12.5% Takaful only Ranking

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