Omar Gouda, the managing director of Africa Retakaful
Session two: Global insurance industry and key implications for the African insurance industry. This session will look at the global best practices, both from emerging and mature markets as well as developments in the Takaful industry and the opportunities in Africa.
Gouda says Takaful prospects for the African market have huge potential but there are also challenges which must be faced and met by the Takaful industry if it is to gain a foothold on the continent.
Some of the challenges include a lack of public awareness about the Takaful industry, as well as a lack of the required financial infrastructure. The industry needs to provide solutions through a variety of means that people trust and understand. “The products that we are supplying, the distribution channels we are employing, and the rules and regulations we adhere to, must be understood clearly by everyone,” Gouda says.
Unlike conventional insurance companies, Takaful operators have to start from scratch in training staff, establishing branches and offices, educating regulators on Shari’ah law, and applying the latest technological methods to what is ultimately still a fledgling industry. Gouda points out that the Takaful insurance industry is growing globally at 12 to 20 per cent and Takaful contributions were expected to reach US$12 billion by 2012. The general insurance category of the Takaful products is forecast to grow by 24 per cent.
“The African continent has played and is expected to play a major role in the Takaful development, for many reasons, among which are the substantial opportunities and the vast need for the Takaful in addition to the lower penetration rates. The above indicators suggest an increasing need for a regular forum for Takaful and Retakaful for enhancement of expertise and exchange of knowledge, ideas and experience to match the increasing need of the Takaful industry and overcoming challenges,” he says.