|Despite a year-on-year premium growth of over 10% in most GCC markets, the Takaful market has long since been considered overpopulated with more than 70 Shariah-compliant insurers in the GCC region competing for premium income of nearly $10bn, about 80% of which is based in Saudi Arabia. A major reason for this is targeting the same customer base as conventional insurance, and unsuccessful product differentiation. (S&P, 2015)
The true essence of Takaful lies in the principle of risk-sharing amongst policyholders and essentially upholding the principle of bearing one another’s burden. However, Shariah divergences prevalent in the industry include partly investing in non-Shariah compliant instruments, insuring risk with Re-insurers instead of Re-Takaful operators, having products that are mere imitation of conventional insurance with questionable authenticity and not maintaining separation of risk between shareholders and policyholders.
Ever-increasing deficits in policyholders’ funds due to a combination of poor underwriting performance and excessively high wakala fees, lack of surplus distribution and no discounts offered to policyholders have contributed majorly in Takaful being at the risk of losing its distinct features in the eyes of customers, in turn forcing itself to compete with conventional insurance solely on the basis of price.
Want to know more on how can Takaful leverage its USP to achieve true competitive advantage? Register Now to hear leading industry experts speak at the 13th World Takaful Conference (WTC), convened by Middle East Global Advisors in strategic partnership with the Dubai International Financial Centre (DIFC) and supported by the Insurance Authority (IA) on April 09 at the Dusit Thani, Dubai.
What else lies in store for you at the 13th WTC? Keynote Addresses by H.E. Ebrahim Obaid Al Zaabi, Director General, Insurance Authority (IA) and Abdulla Mohammed Al Awar, CEO, Dubai Islamic Economy Development Centre (DIEDC), One-on-one interview with a Shari’ah scholar on Innovation & InsurTech, CEO Debate discussing A New vision for Takaful, InsurTech Integrated – a dedicated stream focusing on the impact of disruptive technologies to insurance operators, Panel Sessions and Live polling on key issues gravitating around Takaful, dedicated WTC exhibition & more.
Join the 13th World Takaful Conference as a Partner/Delegate/Speaker by dropping us a line today at: email@example.com
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