Takaful Leaders Discuss New Strategic Imperatives for Sustainable Growth with Profitability at the World Takaful Conference
More than 450 international Takaful leaders gathered in Dubai for the 9th Annual World Takaful Conference (WTC 2014)
Dubai, United Arab Emirates: 14th April 2014: The 9th Annual World Takaful Conference (WTC 2014) witnessed a high profile opening today at the Dusit Thani, Dubai. Confirming its position as the world’s largest and most influential annual gathering of Takaful industry leaders, WTC 2014 gathered more than 450 senior decision makers from over 200 organizations for discussions that tackled the challenges of improving the competitive performance of Takaful players and focused on identifying and capitalizing on the new growth drivers for the global Islamic insurance industry.
The two day event was inaugurated with a special keynote address by Abdulla Mohammed Al Awar, Chief Executive Officer of the Dubai Islamic Economic Development Centre. In his inaugural address Abdulla Mohammed Al Awar discussed the need for an integrated approach to achieve the full potential of the global Takaful industry noting that “the Takaful industry has grown significantly as a viable Islamic alternative to conventional insurance. Though the global Takaful industry has witnessed strong progress, the development of related regulatory and supervisory frameworks has not kept pace and varies substantially between key Takaful markets. In many key countries, the Takaful market is becoming increasingly over-crowded with a number of domestic and international companies competing for a small pool of risks to cover. Industry-wide profit margins have been under pressure and previously strong growth rates have started to decelerate.”
He also stressed that “in line with Dubai’s determination to become the global capital of the Islamic Economy, the Dubai Islamic Economy Development Centre is committed to creating an enabling environment to reignite the growth of the Takaful sector, as part of an integrated vision and The World Takaful Conference (WTC) plays a significant role in shaping the global Takaful industry, providing an international platform to discuss new strategies that will unlock the true potential of the sector.”
The inaugural session was immediately followed by a high-profile keynote plenary session featuring Dr. Bassel Hindawi, Member of the Steering Committee of the MENA Insurance CEO Club, and former Insurance Commissioner Jordan; Zainudin Ishak, Chairman of the Malaysian Takaful Association; and Talal Al Zain, Chief Executive Officer of PineBridge Investments Middle East; which assessed the future prospects for Takaful and evaluated the success stories which are propelling the industry to the next level. The role that financial and investment companies will play in the development of the global Takaful industry were also further discussed during the plenary session.
A key highlight of the 9th Annual World Takaful Conference (WTC 2014) was the high-profile CEO and Industry Leaders’ Power Debate session focusing on tackling the major challenges in the Takaful industry. The session was chaired by Irshied Tayeb, Head of Insurance and Reinsurance, Bin Shabib and Associates ( BSA ) LLP; and featured Firas El Azem, General Manager of Takaful Re Limited; Shahril Azuar Jimin, Chief Commercial Officer of Etiqa Insurance and Takaful; Gautam Datta, CEO of Al Madina Insurance Company; and Walid Jishi, Group Managing Director, Arab Loss Adjusters. The debate analysed how the Takaful industry is faring in achieving critical mass and scale and how profitable growth can be achieved by balancing competitive pressures with the need for risk based pricing.
WTC 2014 also featured the exclusive onsite launch of the 8th Annual Edition of the World Islamic Insurance Directory (WIID 2014). The World Islamic Insurance Directory, jointly published by Takaful Re and the Middle East Insurance Review, has over the years become a critical reference guide to record the growth and development of the international Islamic insurance industry. The 2014 edition of the WIID provided detailed financial and management data on over 200 international Takaful and ReTakaful operators and encapsulated the most current information primarily sourced from the major players in the market.
The WTC 2014 exhibition, which was held along the sidelines of the conference, showcased the latest products, services and innovations from over 35 international exhibitors. Commenting on their participation in the event Mohamed Hussein El-Dishish, Chief Executive Officer, Emirates Retakaful Limited (Emirates RE), noted: "A major challenge faced by the global Takaful industry is the lack of added value from the Retakaful industry leading to a over-representation of conventional reinsurers in the market. However, recent developments and the emergence of new sizeable Retakaful companies is an opportunity for the whole Takaful industry to have an integrated approach, and move to the next level. As the global Takaful industry is set to grow further, projected to hit the US$ 17 billion mark in 2015, a lot more additional participation and leading role is needed in the Retakaful industry. To meet the demand, Retakaful companies must move from a follower to a more leadership position. We are delighted to see strengthening the Retakaful industry as one of the key areas covered at this year’s World Takaful Conference.”
Addressing the issue of scale, Dr. Saleh Malaikah, Chairman, Rusd International Holding Group, Vice Chairman and Chief Executive Officer, SALAMA Group said that “Achieving and sustaining profitable growth poses a number of challenges for the Takaful sector and the question of the lack of scale amongst many industry players has yet to be properly tackled. With Takaful contributions currently around only about 1% of the value of the total global insurance premium universe, Takaful has a long way to go in order to become more mainstreamed – nevertheless this low level of penetration also points to tremendous further growth potential if the industry can successfully address these challenges. This calls for industry leaders to take proactive steps and re-think strategies to realize the true potential of the global Shari’ah-compliant insurance market. As one of the world’s largest Takaful operators, we at SALAMA are continuously expanding our product portfolio, in terms of the breadth of our offering as well as geographically, in order to increase our global footprint and cater to the increasing sophistication of our clients."
Amer Daya, Chief Executive Officer, Al Hilal Takaful, further expanded on this key point noting that “Efficiency, profitability and scale have become increasingly critical for the Takaful industry and it is essential to find innovative solutions to manage the challenges of an intensively competitive market and drive operational efficiencies to improve financial performance in the industry. Supported by favorable demographics, the ongoing development of supporting regulatory frameworks, growing affluence, and the overall development of the broader Islamic finance industry in high-growth emerging markets, the international Takaful industry is poised for continued strong growth, with the potential to even surpass the conventional insurance industry in some key markets.”
Highlighting the exciting growth potential, Christian Gregorowicz, CEO NEXtCARE and CEO MEA Allianz Global Assistance, said that “The sector is still poised to sustain impressive double-digit growth in the coming years, although we have recently seen some companies struggling for scale and face increasing competition from existing or new entrants and discussions today focused on meaningful insights on how Takaful market share can be further expanded while strengthening profitability and RoE."
Day two of The World Takaful Conference will continue on Tuesday the 15th of April and will open with a keynote address from Prasanna Seshachellam, Director & Head of Prudential Risk Supervision of Dubai Financial Services Authority (DFSA).