1 International Takaful Summit 2007, London The Role of Pure Retakaful Operators versus Conventional Reinsurers: Envisioning the Future 2 nd November 2007, London, UK Kamsani Tati Tokio Marine Retakaful

2 Sharing of experience and perspective

3 Business Models Traditional American Japanese

4 History & Development of Islamic Finance Source: Islamic Financial Services Industry Development. The Ten–Year Framework and Strategies A Joint initiative of the Islamic Research & Training Institute of IDB and IFSB

5 History & Development of Islamic Finance Source: Islamic Financial Services Industry Development. The Ten–Year Framework and Strategies A Joint initiative of the Islamic Research & Training Institute of IDB and IFSB

6 History & Development of Takaful Sudan 1979 Malaysia 1985

7 Family Takaful in Malaysia New BusinessBusiness In Force Calendar Year (Period) No. of Certificates Contribution (RM million) No. of Certificates Contribution (RM million) , , , , , , , , , , , , Source: BNM, Takaful Annual Report, 2000 & 2002 and Syarikat Takaful Malaysia Bhd

8 History & Development of Takaful Encouraging development in Malaysia created a tsunami of interest in Takaful in other regions

9 Takaful and Insurance Twins but not identical?

10 Insurance in Islam Providing protection is encouraged Elements of uncertainty ( gharar ) in the contract and usury ( riba ) in its operations made it not in line with Islamic law

11 Sharing …….

12 Islamic Insurance Collectively providing protection Modus operandi within the parameters of Islamic law

13 Insurance in Islam Islam is not only a religion, it is also a belief In Islam, law and religion, law and morals, and law and so-called “church” are inseparable (Gibb, Modern Trends in Islamic Law, p.87)

14 Commercial Insurance is prohibited International Islamic Fiqh Academy’s resolution 9 (2/9)

15 Takaful The difference with Insurance is only visible from Islamic perspective.

16 Takaful The risks that Takaful companies managed are no different from those risks taken by conventional insurance companies.

17 Takaful It is the duty, responsibility and accountability of Takaful operators to ensure that their entire business operations (including Retakaful arrangements) are Shariah compliant Takaful operators must refrain from invoking the doctrine of necessity so easily

18 Insure the Insurer It can be liken as the suspensions of a car; the road remains bumpy but the jerks experienced by the driver is reduced.

19 Reinsurance Retakaful From the first dollar –Quota share –Quota share plus surplus In excess of retention –Surplus Retained portfolios –Cat XL Capital –Financial Re From the first dollar –Quota share –Quota share plus surplus In excess of retention –Surplus Retained Portfolios –Cat XL Capital –Financial Re

20 Retakaful Companies Hire experienced & professionally qualified staff Training & development programs match the insurance industry Develop core competencies matching the insurance industry Remuneration package within the insurance industry standards

21 Retakaful Companies Capacity with attractive rates Technical supports such as product pricing and design etc Technical training- actuarial, underwriting, claims assessment etc Inputs are in Shariah perspective Pay zakah

22 The Role of Retakaful Source: Islamic Financial Services Industry Development. The Ten–Year Framework and Strategies A Joint initiative of the Islamic Research & Training Institute of IDB and IFSB

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25 “AA/Stable

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27 A Shariah compliant Takaful operator would readily submit that Retakaful providers are vital to the Takaful industry

28 Complete and Caring It completes the whole chain of Takaful concept It accelerates the growth and development of the Takaful industry It creates distributable fund for the needy in the form of zakah paid by Takaful and Retakaful companies

29 Envisioning the future….

30 T akaful and Retakaful

31 Thank you