Swiss Re Executive Forum – knowledge transfer on the move

Economists share key findings on Takaful with clients in Kuala Lumpur and Jakarta through a series of executive forums.

As part of Swiss Re’s commitment to knowledge transfer, the company organised a series of executive forums in Southeast Asia for its Takaful clients. 

Speakers were Swiss Re economists, Daniel Staib and Prudence Ho, who co-authored a sigma entitled “Insurance in the emerging markets: overview and prospects for Islamic insurance”, published in October 2008. 

The first leg of the Southeast Asian tour kicked off in Singapore on 30 March with Daniel Staib speaking at the Fourth Asian Takaful Conference, organised by Asia Insurance Review, which attracted more than 80 delegates from around the region. 

On 1 and 3 April, the Swiss Re economists were in Jakarta and Kuala Lumpur respectively to present key findings from the sigma to Takaful clients at specially arranged executive forums. Swiss Re is in the process of setting up reTakaful operations in Kuala Lumpur and Marcel Omar Papp, designated head of this operation, was also at the forum to present the case for the Wakalah Waqf model which has been adopted by Swiss Re’s reTakaful solutions in Zurich. 

Both forums were well-attended with more than 30 participants each. Interesting highlights included: 

• Muslim countries make up for 23% of the GDP and the population of the emerging markets, but the share of insurance premiums is only 10.8%.
• General Takaful dominates the market in the Middle East, while Family is more important in South & East Asia.
• Muslims are still underserved by the insurance industry, despite the strong growth of the Takaful market.
• The patterns of insurance markets in the Middle East and Southeast Asia are different. ME: commercial lines dominate while in SEA, personal lines play a more important role.
• Modes of operation of Takaful companies are converging slowly, but differences in detail persist. Regulation, global companies and associations play an important role in this process.
• Penetration levels of Takaful are expected to increase, but the process will take time and also depends on a maturing Islamic finance sector.
• Takaful, like conventional insurance will be affected by the global economic recession. Focus on technical performance will become key in light of lower investment income in the future.
• However, the favourable fundamentals (young and rapidly changing demographics) are likely to help the industry regain growth momentum at a faster pace.

It was a good turnout at the KL forum. 

Following the presentations by Swiss Re’s economists, there were lively and interactive question and answer sessions, demonstrating keen interest by clients in the subject matter.