Download - Family Takaful ASIA
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FAMILY TAKAFUL IN ASIA:
Mohammad Azmatullah Sharif, FSA, FPSA
Head of Pricing & Takaful, GCC Region -
Life, Munich Re Underwrting Agents (DIFC), Limited
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Agenda
1. Some basics of takaful and retakaful
2. Markets we will study: GCC, SA and SEA
3. Current situation of the Family Takaful market
4. What do the Statistics tell us
5. Common Family Takaful Products
6. Challenges
7. Prospects and Growth Opportunities
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Takaful, Arabic word, meaning "guaranteeing each other"
Islamic Insurance system is a mechanism through which
participants donate part or all oftheir contributions whichare used to pay claims forloss suffered by some participants
Mechanism ofmutual help and solidarity, based on a systemof Pooling
Basic of Takaful and Retakaful
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Retakaful: in very simple terms
Takaful for the Takaful Operators
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Wakala Model Mudaraba Model Hybrid Model
Basic of Takaful and Retakaful
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Markets: GCC, South Asia and SEA
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Current Situation of the Takaful Market
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Comparison of Family Takaful Contributionsacross regions and years
Source: Milliman Summary of the global
family takaful report 2011
Source: Milliman Summary of the global
family takaful report 2011
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What do Statistics tell us
32%
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A L,000,000,000,000,000,000,000,000,000,000,T
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What do Statistics tell us
2.5
Trillion 32%0.09%
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What do Statistics tell us
And what do we get after knowing all of the Stats
Moreconfused
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Common Family Takaful Products
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Common Products
Credit Life
Group Life
Individual Life
Critical Illness
Savings Related
Common Products
Credit Life
Group Life
Individual Life
Critical Illness
Savings Related
GCC
Distribution Channels
Brokers
Company Employees
Sales Agents
Banks
Distribution Channels
Brokers
Company Employees
Sales Agents
Banks
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Common Family Takaful Products
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Common Products
Individual Life
Group Life
Savings Related
Critical Illness
Credit Life
Common Products
Individual Life
Group Life
Savings Related
Critical Illness
Credit Life
South Asia
Distribution Channels
Sales Agents
Bancassurance
Company Employees
Brokers
Distribution Channels
Sales Agents
Bancassurance
Company Employees
Brokers
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Common Family Takaful Products
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Common Products
Individual Life
Critical Illness
Savings Related
Credit Life
Group Life
Common Products
Individual Life
Critical Illness
Savings Related
Credit Life
Group Life
South East Asia
Distribution Channels
Sales Agents
Bancassurance
Company Employees
Brokers
Internet
Distribution Channels
Sales Agents
Bancassurance
Company Employees
Brokers
Internet
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HAJJ PRODUCT
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Hajj ProductPru BSN Ummah (Malaysia)
Supplementary savings and protection plan for the Hajj / Umrah
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Hajj ProductPru BSN Ummah (Malaysia)
Death and Total & Permanent Disability
Double benefit if on Hajj or Umrah
RM 2,000 (~ AED 2,400) compassionate benefit
Badal Hajj
If claimed then policy will pay nominated party to perform Badal Hajj
RM 3,000 (~ AED 3,600) paid to nominee or Tabung Haji Travel & Services to perform
for you
Critical Illness
Accelerated rider cover
Waiver of contribution
36 illnesses covered
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JUMPING JUVENILE
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Jumping Juvenile
Jump features are locked into product design
5 or 10 times increase
At age 18, 21, 25
Not chosen by the policy owner
Fully Underwritten plan
Look at longer term risks, family history, etc.
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HIGH NET WORTH PRODUCT PREFERREDUNDERWRITING
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What is Preferred Insurance?
Initially preferred insurance was distinguished by:
Tobacco or non-tobacco use
Four classes:
Male Preferred (i.e. non-tobacco use) or called Male Non-Smoker
Female Preferred or Female Non-Smoker
Male Standard or Male Smoker
Female Standard or Female Smoker
Plus an sub-standard rating class applicable
Easy to split insureds into smoker / non-smoker classification
Easy for consumer and producers to understand and sell
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Product Design
Product Type:
Works best for products where the mortality premium is a large portion of the premium cost
e.g. Term insurance, Bundled vs. unbundled products
Classes:
If have 2 non-smoker classes and 1 smoker class, this is:
6 underwriting classes (male / female split)
Face Amount:
Minimum face amount should be tied to when full underwriting requirements come into
effect USD $175,000 - $300,000 depending on issue age
Stricter underwriting requirements
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Group Market: high FCL and NML demandsUnsustainable prices and terms
Lack of Life Insurance awareness amongst operatorsDistributors driving (or trying to) the marketNon unified regulations
No standard mortality tablesNo minimum pricing basis
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Market challenges: Practical View
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TakafulProspects and Opportunities for Growth
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Life Insurance and Family Takaful Penetration is very lowin the region
Takaful and Retakaful Operators need to work together
Design and introduce products suitable to the regionSimple productsSmall Sum CoversSimplified or no underwritingSimple rate structure unit or age bandedProduct ideas from other markets for a specific target market
Marketing strategies Internet, TV/Radio, Stands in the Malls etc
TakafulProspects and Opportunities for Growth
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Sharia Boards of retakaful operators work together:
Sharia Committees of Munich Re, Swiss Re and Hannover Re met in2010 in Dubai to agree on general retakaful principlesto facilitate global harmonisation.
Strong Regulatory Regime to support the growth of Takaful and Retakaful
Takaful Pools, pricing, reserving, sales practices should be regulatedEg: Malaysia
Standard Policy/Treaty Conditions wrt Takaful
TakafulProspects and Opportunities for Growth
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The nature of takaful: risk sharing v risk transfer
Retakaful: the Takaful for the Takaful Operators
The region provides many opportunities for takaful to grow
There are many challenges to overcome
All the stake holders need to work together to make it a success
Recap
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THANK YOU VERY MUCHFOR YOUR ATTENTION
2009Mn
chenerRckversicherungs-Gesellschaft
2009
MunichReinsuranceCompany
Mohammad Azmatullah Sharif, FSA, FPSAHead of Pricing and Takaful, Life - [email protected]
Mohammad Azmatullah Sharif, FSA, FPSAHead of Pricing and Takaful, Life - [email protected]
Wishing you a successful Takaful
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Disclaimer
Munich Re Group is not a legal, tax or accounting advisor and makes no representations as to the accuracy of any data or information
gathered or prepared by Munich Re Group or advisors hereunder. Your company should therefore consult with its own tax, legal or other
advisors and make its own independent analysis and investigation of the proposed transaction, as well as the financial, legal, accounting
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independent decision whether or not to enter into any agreements in connection with the transaction. This analysis and proposal contains
indicative terms for discussion purposes only. Munich Re Group gives no assurance that any transaction will be consummated on thebasis of these indicative terms and no specific issuer is obliged to issue any security or instrument on such indicative terms. This
proposal does not constitute an offer to sell or any solicitation of any offer to buy or sell any security or instrument or to enter into any
transaction on such indicative terms. The data and analysis does not assure that securities can be issued at certain terms and conditions.
All terms and conditions are subject to a mutually agreed engagement letter. This proposal is not intended to provide the sole basis for
any evaluation by you of the transaction, security or instrument described herein and you agree that the merits or suitability of any such
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Munich Re Underwriting Agents (DIFC) Ltd are Authorized and Regulated by the Dubai Financial Services Authority.
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Data Sources
ERNST & YOUNG: The World Takaful Report 2012
Swiss Re Sigma: 2009
Milliman: The First Global Family Takaful Report 2009
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