Transcript Intro To Egyptian Takaful Life Company

Family Takaful In Africa
Hesham Abdel Shakour
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AFRICA
A continent once known more
for witchcraft than worship
has become a
stronghold and a flash
point - for the
world’s two
largest
religions,
Islam
and
Christianity
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AFRICA
According
to
both
Encyclopedia Britannica and
World Book Encyclopedia,
Islam is the largest religion in
Africa, followed by Christianity.
Africa harbors the highest
percentage of Muslims (52.39%)
A quarter of the world's
Muslims live in Africa. These
are about 423.5 million.
Northern Africa is heavily
Muslim and southern Africa is
mostly Christian and the two
religions meet in a 4,000-mile
belt from Somalia to Senegal.
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Birth & Progress of Takaful in Africa
Takaful as practiced in the sixth century (Christian Era A.D. and +50 Hijrah)
actually evolved from tribal practices of mutual assistance dating back to pre
Islamic times.
There are several examples in pre-Islamic history whereby families, tribes or
related members throughout the Arabia peninsula pooled their resources as a
mean to help the needy on a voluntary and gratuitous basis.
Although it is widely acknowledged that Takaful
(mutual cooperation) existed among Communities
and early Muslims in different forms, Takaful as
we know it today started in the Sudan in 1979.
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Birth & Progress of Takaful in Africa
Despite being considered as the birth place of Takaful (by virtue of origin in
Sudan), the development of Takaful in other African countries has been slow.
This is a factor mostly attributed to lack of regulatory environments, low
purchasing power and poor perception of insurance in general in these markets.
Nonetheless the huge Muslim population in some of the countries, growth in
technology and economies and the ideal principles of Takaful is predicted as a
revolution in this emerging markets and is thus projected as a big growth field for
Takaful players and concept in general.
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Global Takaful
From this humble beginnings Takaful has grown to become a phenomena in the
global economies with :
 an estimated premium of USD 8.9 Billion in 2010 .
 about 180 Takaful Companies almost 46 countries around the world
 200 Takaful windows ( conventional players offering takaful)
 20 Re-takaful Players
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Is there a potential for Takaful?
The development of Takaful companies is complimentary to the establishment of
Islamic banks.
What happened in the Islamic banking and finance during the world economic
crisis?
While conventional banking is largely debt based, and allows for risk transfer,
Islamic banking, by contrast, is asset based, and centers on risk sharing.
Islamic banks contributed to financial and economic stability during the crisis,
given that their credit and asset growth was at least twice as high as that of
conventional banks
In view of their robust growth during the crisis, Islamic banks will likely take a
growing market share in the future
This creates a trust in the Islamic economy which increased the need for shariaa
compliant financial derivatives such as Takaful
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Is there a potential for Takaful?
Family is the basic social order in the African societies
The African family has a high dependency ratio - only a few members of the family
work and take the burden of the rest.
When the family suffers from the stresses and strains as a result of a disability or
loss of the family leader, other family members, neighbours and friends feel
obliged to step in to support in one way or another to do so .
Traditions and culture embedded these values amongst the tribes.
This obligation is not merely social but a socio -cultural and socio -economic
obligation to aid in the welfare of the different families….
Solidarity………………………. Takaful
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Is there a potential for Takaful?
Takaful Products are not exclusive to Muslims
The right product and pricing could attract any customer irrespective of their
origin or faith.
Through effective and efficiently priced products that identify and meet the needs
of the low end and the poor people, Takaful is short-cut to progress and improves
livelihoods of the low income earners
The concepts of Takaful thus are the same as with insurance, where the bottom
line is not profits for shareholders and poor servicing of claims but one of clarity
and transparency with the welfare of members at heart coupled with surplus
sharing and distribution.
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Mitigating misconceptions about Takaful
Misconception
Products only Relevant to Muslims
Products are too complicated
The truth is
Covers large investor base,
Muslims and non Muslims
Only difference is the Shariaa
screening process
Restricted global market
50% of SP500 is Shariaa Compliant
Performance drag
Asset based, risk sharing
mechanism
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So what are the Challenges??
Limited
investment
vehicles
Global
awareness
Takaful
Challenges
Lack of
skilled
resources
Lack of
harmonized
regulations
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A New Dawn in Africa
Takaful maybe small in Africa, but small can be big
Takaful and tailor made products of
MicroTakaful have the great potential to
significantly contribute to
growth of the
African economies and support to the masses.
It appeals to many irrespective of their religious believes. It is in harmony with
anything good we want to do for these societies
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Thank You
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