Milliman has released the findings of the first known study analysing the general and the family Takaful industries, separately, across all major markets. The full report will be released and discussed at the International Takaful Summit in London today.
‘While there have been a few reports analysing the US$14.9 billion Takaful market, they typically provide a combined analysis,’ said Farzana Ismail, head of Milliman’s Life Insurance and Family Takaful consulting practice in South East Asia. ‘Since drivers for general Takaful can be significantly different from family Takaful, there has been concern around the distortion caused by analysing them together and demand for a separate analysis. This report helps meet that demand.’
‘The GCC region dominates the global market penetration of Takaful, which grew 14% in 2015,’ said Safder Jaffer, Milliman’s managing director for the Middle East & Africa. ‘However, a closer look at the market reveals that there is virtually insignificant penetration of family Takaful, providing a huge opportunity for growth.’
Highlights from the Milliman Global Takaful Report 2017:
• Coverage of the major Takaful markets: South East Asia, Gulf Cooperative Council and Africa and the smaller markets, by country, analysing data from 2011 to 2015
• Market trends including changes in gross written contribution (GWC) and financial ratios
• The regulatory environment and changes in each market and their impact on the industry
• Opportunities for and challenges preventing the growth of Takaful
To download the report, click here.
Authors of this report can be reached on:
• Farzana Ismail in Kuala Lumpur at +603 2722 7181, firstname.lastname@example.org;
• Safder Jaffer in Dubai at +971 386 6990, email@example.com
Milliman was named “Service Provider of the Year” for the third consecutive year at the Middle East Insurance Review’s 2016 Middle East Insurance Industry Awards (MIIA). The award recognizes Milliman’s leadership in the insurance and reinsurance industry, citing the firm’s unique multidisciplinary consultancy services, its implementation of educational and professional initiatives, and noting Milliman’s work as “a catalyst for the betterment of the industry.”
We are honored to receive this award for the third year in a row. At Milliman we believe in offering innovative solutions that serve not only our clients but the industry and region as a whole. We thank the Middle East Insurance Review and the esteemed panel of judges for recognizing the leading work we do throughout the Middle East and North Africa.
The Middle East Insurance Review is a monthly publication that aims to meet the information needs of insurance practitioners in the Middle East and North Africa (MENA) region and the global Takaful industry. The MIIA, now in its third year, is heralded as the premier awards of the MENA region with a clearly defined criteria and a transparent process served by a panel of 20 distinguished Judges.
For more information about the awards, click here.
Milliman was named the Service Provider of the Year at the Middle East Insurance Review’s Middle East Industry Awards 2015, which were held in November. This is the second consecutive year that Milliman has won this award. Middle East Insurance Review is a monthly publication that aims to meet the information needs of insurance practitioners in the Middle East and North Africa region and the global Takaful industry.
Significant regulatory changes are occurring in the Middle East, and Milliman has educated and will continue to educate the industry through a series of workshops, collaborating with others in the industry.
“We are delighted to have been recognised for our overall excellence for the second year in a row,” said Safder Jaffer, Managing Director, Dubai office. “The fact that Milliman has been recognised shows that actuaries are making a difference to the value proposition of the insurance and reinsurance industry in the region. And we will enhance our service proposition by focusing on developing talent within client companies as we continue to provide innovative solutions.”
For more information about the awards, click here.
Milliman today published research on regulatory reform in the United Arab Emirates (UAE). The regulations, issued earlier this year by the Insurance Authority (IA), include a transition period of up to three years, but insurers are advised to begin transitioning immediately.
With the new guidelines, the IA has certainly raised the bar for insurance regulations in the region. We expect significant change for both conventional insurers and for Takaful companies as the new regulatory framework is enacted in the coming months and years.
Companies face a number of key changes:
• A higher level of supervision by the IA
• A need for major improvement in risk management practices, including in the framework for enterprise risk management (ERM)
• A requirement to work closely with actuaries on solvency, reserving, investments, and financial forms
For more on the framework, download this paper. You can also download the following presentations prepared earlier this year:
• “New Financial Regulations for Insurance and Takaful Insurance Companies—An Overview”
• “The Financial Regulations: A Legal Perspective”
• “Investment Risks and Asset Valuation Considerations”
• “Regulations Pertinent to the Technical Provisions”
• “Solvency and Solvency Forms for UAE Insurance Companies”
• “Impact of new UAE Insurance regulations on insurance companies’ ERM”
Some insurers in Gulf Cooperation Council (GCC) countries should consider a more robust enterprise risk management (ERM) program. Companies that enhance ERM processes may achieve a competitive advantage in their marketplace. Safder Jaffer and Mark Stephens offer some perspective in their article “ERM in the Middle East: Moving beyond compliance.”
Here is an excerpt:
Value-driven ERM process
Successful ERM programs should be driven by the following value drivers:
• Integration into performance management and reduction of performance volatility;
• Capital efficiency;
• Active stakeholder management; and
• Operational excellence.
Integration into performance management
ERM should help a company understand potential variation from goals and objectives. Most organizations are driven by a series of financial and operational metrics and they are the assumptions in financial planning. Achieving these objectives supports dividends, capital allocation, and incentives. Therefore, understanding vulnerabilities or high-risk exposures is critical in prioritizing limited control and mitigation capital.
A proactive and efficient ERM approach can even provide business or strategic advantages. For example, a proactive management of the rough materials costs volatility could help companies to support commercial campaign(s) with discounts which reflect the change in rough material costs.
ERM can support higher capital efficiency through a risk-adjusted return on capital (RAROC) analysis. High-quality, risk-adjusted financial planning is growing rapidly and
there are many benefits derived that can result in a more effective capital allocation process. The ERM process should inform the financial planning process and there should
be a resulting reconciliation of risk exposures between the two processes. More collaboration, communication, and data sharing are essential to this activity.
This article was first published in the February 2014 edition of Middle East Insurance Review.