Omar Gouda - LONDON – 17 th - 18 th February 2015 RETAKAFUL OPERATORS: Driving For Takaful Growth

Omar Gouda - LONDON – 17 th - 18 th February 2015  General Overview- Global Takaful Market.  Features of Global Takaful Market growth  Takaful growth challenges  How Retakaful Operators can assist Takaful growth  African Retakaful: Africa Re’s response to Market Challenges

Omar Gouda - LONDON – 17 th - 18 th February 2015 Global Takaful Market: Takaful Industry is the youngest and most dynamic among the Islamic core financial markets. Takaful or the Islamic insurance continues to maintain strong growth momentum Over , The global Takaful market is expected to grow by minimum of 14% annually.

Omar Gouda - LONDON – 17 th - 18 th February 2015 Features of Global Takaful Market Growth:  Growth, Technical Margins and surpluses prospects for Takaful operators differ significantly from market to market.  Wide deviations of markets in respect of economic conditions, industry, legal, regulatory and operational structures/frameworks.  Intense competition between the Takaful operators within the Takaful Industry, and with the conventional insurers.  Despite the volatility in the financial markets, the global Takaful industry maintained the high growth momentum

Omar Gouda - LONDON – 17 th - 18 th February 2015 Takaful growth challenges: Despite the relatively high Takaful growth rates, still there are many challenges facing the Takaful Industry:  Low Takaful penetration rates - A common feature of most Takaful markets  Limited of product design, research and development, due to low expenditures on R&D.  Limited market strategies to reach mass markets/customers.

Omar Gouda - LONDON – 17 th - 18 th February 2015 Takaful growth challenges:  Absence of appropriate legal framework in many markets.  Absence of clear operational framework in many markets.  Absence of clear regulator’s frameworks in many markets.  Lack of/weak customer awareness.  Internal Extensive/sever competition between the Takaful Operators  Extensive capacity, and very well capitalized conventional competitors.

Omar Gouda - LONDON – 17 th - 18 th February 2015 RATAKAFUL IS ESSENTIAL FOR THE SUCCESS OF TAKAFUL

Omar Gouda - LONDON – 17 th - 18 th February 2015 Why there is a need for Retakaful??  Efficiency of risk spread between Takaful/Retakaful FUNDs  Providing capacity to cover Peak risks or hazardous risks.  Technical support:- A.Risk based pricing B.Underwriting training and support C.Product design and refinement D.Retakaful treaty (contract) wordings E.Setting up Takaful operations

Omar Gouda - LONDON – 17 th - 18 th February 2015 Why there is a need for Retakaful??  Financial support to the Participant’s funds, and improving liquidity.  Minimize the effect of Loss Ratio fluctuation by smoothing results over longer time  Legal requirements, as the Retakaful protection is usually required for license.  The most important factor is the Shariaa requirements.

Omar Gouda - LONDON – 17 th - 18 th February 2015 How Can Retakaful Operators assist Takaful growth?  Retakaful operators can assist Takaful industry in various ways:  Enhancement of Retakaful Regulators/ or Supervisory Authorities Takaful and Retakaful Operators share the responsibility of creation and maintaining good relationship with the Regulators.  Formulation of effective channels of communication with regulators and deliver any required assistance and supports needed.  The distributed surplus can maintain a better balanced technical portfolio of Takaful operators

Omar Gouda - LONDON – 17 th - 18 th February 2015 How Can Retakaful Operators assist Takaful growth?  Assist in the establishment of/supporting educational institutes/training centers either dedicated solely to Takaful/Retakaful or as a part of its programs.  Conduct training, workshops, seminars and conferences  Support various efforts and initiatives which can serve Takaful industry  Assist the Takaful’s Industry Federations and Associations.  Technical supports to Takaful companies  Assist in improving the levels of public awareness, which is one of the main factors affecting the growth of Takaful Industry.

Omar Gouda - LONDON – 17 th - 18 th February 2015 How Can Retakaful Operators assist Takaful growth?  Assist in the standardization; which: A. reduces transaction costs, B.improves the awareness of legal rights and C.minimize the marketability problems across borders.  Encourage and develop the Enterprise Risk management concepts for the Takaful industry  Enhance the Social Responsibility as a material part of Takaful concepts.  Enhance the unification of the Takaful modules and Shariaa concepts across countries.

Omar Gouda - LONDON – 17 th - 18 th February 2015  Africa Retakaful: Response to Market need  Africa Retakaful, (fully owned subsidiary of Africa Re) was set up in 2010 in Cairo.  Commenced business in 2011 to provide all types of Shariah compliant products.  As a specialized regional vehicle, it seeks to increase Takaful awareness in Africa, Asia & M/East.  Fully committed to Takaful industry  Africa Re, rated A- by Standard and Poor’s and AM Best.

Omar Gouda - LONDON – 17 th - 18 th February 2015  Africa Retakaful (Wakala & Mudaraba) models.  The Takaful operations-based on Wakala model with management expense charged as actual.  No operational profits to be shared by the shareholders  The investment model-the Mudaraba type- shares profit and loss with participants.  The Retakaful fund is a Shariah compliant equity investment scheme.

Omar Gouda - LONDON – 17 th - 18 th February 2015 Thank you