family takaful asia

8/13/2019 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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5

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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2.5

Trillion 32%0.09%


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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


Brokers

Company Employees

Sales Agents

Banks


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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


Sales Agents

Bancassurance

Company Employees

Brokers


Sales Agents

Bancassurance

Company Employees

Brokers


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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


Sales Agents

Bancassurance

Company Employees

Brokers

Internet


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


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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


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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

and tax consequences thereof, the creditworthiness of the parties involved and all other matters to the transaction prior to its own

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

transaction, security or instrument to your particular situation will be independently determined by you including consideration of the legal,

tax accounting, regulatory, financial and other related aspects thereof. In particular, Munich Re Group owes no duty to you t o exercise

any judgement on your behalf as to the merits or suitability of any transaction, security or instrument. The information contained herein is

provided to you on a strictly confidential basis and you agree that it may not be copied, reproduced or otherwise distributed by you (other

than to your professional advisors) without prior written consent.

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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family takaful asia

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