1. 1 Abdul Rahman Al Baker Executive Director - Financial Institutions Supervision 5 th May, 2009 Takaful Industry – Challenges & the Way Forward

2. 2 Overview Takaful Industry Globally & in Bahrain The Main Factors for Growth of Takaful The Current & Future Challenges The Way Forward

3. 3 Year Source: Ernst & Young US$ millions The Global Takaful Contributions Average Annual Growth of 35% per annum

4. 4 North Africa Egypt 3 Algeria 1 Libya 1 Sudan 15 GCC countri es Bahrain 7 UAE 6 Kuwait 12 KSA 37 Asian Countries Malaysia 12 Indonesia 3 Pakistan 4 The Takaful Industry Globally 124 Takaful Companies Globally Source:Ernst & Young

5. 5 Year Source: Ernst & Young US$ millions The Gross Takaful Contributions in the GCC Average Annual Growth of 30% per annum GCC (CAGR) Bahrain 98% Qatar 50% Kuwait 22% UAE 62% KSA 26%

6. 6 The Takaful Industry in Bahrain CBB Solidarity General Takaful Allianz Takaful Legal & General Gulf Takaful T’azur Company AIG Takaful Enaya Takaful International Solidarity Family Takaful Hannover Retakaful ACR Retakaful 7 Takaful companies & 2 Retakaful Co.

7. 7 The Takaful Industry in Bahrain

8. 8 The Takaful Industry in Bahrain Change in Mix of Takaful Contributions

9. 9 The Main Factors Contribute to the Growth of Takaful Industry The Significant Growth of the Islamic Banking The Major Infrastructure & Construction Projects in the region Low Insurance Penetration in the Mena region Muslim Population & Demography Significant Economic Growth in the region Regulatory Initiatives

10. 10 Challenges facing Takaful Industry Corporate Governance issue regarding Policyholders Standardization of Takaful Accounting Standards & Disclosure. Lack of Human Resources

11. 11 Challenges facing Takaful Industry Development of Islamic Instruments Market Limited Retakaful Capacity Banc-takafulassurance & Micro-takaful Misconception

12. 12 The Way Forward……. To Establish appropriate Corporate Governance for Takaful Companies Enhance the Business Conduct of Takaful Companies Appropriate Distribution Channels

13. 13 The Way Forward……. AAOIFI & IFSB need to update Takaful Standards and to Contribute to Development of Consistent Standards Proper Risk Management & Investment Framework Enhance the Public awareness of Takaful

14. 14 Thank You