TAKAFUL: An Opportunity to  Extend the Provision of       Microtakaful
Content    1.    Takaful Insurance Africa (TIA)    2.    The Insurance industry in Kenya    3.    The Takaful Concept    4...
About TIA• TIA was founded in Nov  2008• TIA licensed by the  Insurance Regulatory  Authority of Kenya in  January 2011• T...
About TIA• Over the last one year  TIA has gained market  acceptability and has  expanded to open 4  offices including the...
The Insurance Industry in Kenya    •   Population of 40 million people    •   45 insurers    •   Kshs 92 billion (USD 1.1 ...
The Takaful Concept    •   As a risk management scheme    •   As a resource pooling model    •   As an investment scheme  ...
The Need for Takaful in Kenya    •   The uninsured Muslim population    •   A desire for Shariah compliance    •   The nee...
The Takaful Target Market    •   Takaful as a model for all        consumers of risk management        products    •   Sat...
Wider Demand for Takaful in Africa    •   Significant Muslim population in        Africa    •   A fit between the Takaful ...
What is Micro-Takaful? • An insurance systems that offer products to lower   end of the market at low costs. • A risk-pool...
Characteristics of Micro-Takaful     •   Simple product design,     •   Frequent & affordable premium payments,     •   Pa...
Need for Micro-Takaful     • Limited reach of the insurance sector     • The need of uninsured masses     • The missing Mu...
Benefits of Microtakaful                                              Opens                          Results in     Helps ...
To Succeed… • At least 10,000 members (if life insurance is offered). • Efficient and low-cost collection system. • Well d...
Microtakaful Products     Most Complex     Least Complex15
Opportunities      Provision of Microtakaful products to       nomadic communities in remote areas –       Livestock cove...
TIA Microtakaful Approach17
TIA Microtakaful Approach• Insert the Mpesa 18
19
20
TIA Microtakaful Approach• Takaful Bima Poa Cover – A Funeral  Expenses cover for the mass market  (under development) 21
Challenges     • The Industry is currently unregulated     • Government and IRA to come up with       incentives to encour...
Challenges     • Technological challenges –       identifying the right platform     • Informal schemes: convincing the   ...
Partnerships/Channels     • For TIA to succeed in this untapped area, there is need to       team up with a number of key ...
Conclusion     • Microtakaful offers great       opportunities to change the lives of       communities.     • Given the l...
A new dawn in Eastern Africa11/13/12              26
Upcoming SlideShare
Loading in …5
×

Takaful: An opportunity to Extend the Provision of Microtakaful

906 views

Published on

Presentation made by Hassan Bashir (CEO, Takaful Insurance of Africa, Kenya) at the 6th ICMIF Development Network Seminar (1-2 November 2012; Nairobi, Kenya)

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
906
On SlideShare
0
From Embeds
0
Number of Embeds
153
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Takaful: An opportunity to Extend the Provision of Microtakaful

  1. 1. TAKAFUL: An Opportunity to Extend the Provision of Microtakaful
  2. 2. Content 1. Takaful Insurance Africa (TIA) 2. The Insurance industry in Kenya 3. The Takaful Concept 4. The need for Takaful in Kenya 5. The Target Market 6. Wider Demand in Africa 7. Microtakaful, 8. Need, Products, Opport & Challenges 9. Partnership, Channels 10. Conclusion2
  3. 3. About TIA• TIA was founded in Nov 2008• TIA licensed by the Insurance Regulatory Authority of Kenya in January 2011• This is a License to offer General Takaful products• TIA is the first Takaful Operator in the Region11/13/12 3
  4. 4. About TIA• Over the last one year TIA has gained market acceptability and has expanded to open 4 offices including the Head Office11/13/12 4
  5. 5. The Insurance Industry in Kenya • Population of 40 million people • 45 insurers • Kshs 92 billion (USD 1.1 b) • 3% penetration level • TIA share in 2011, 0.2% (USD 2.1m), 8 months of operation • Expected share 2012 – 0.55%5
  6. 6. The Takaful Concept • As a risk management scheme • As a resource pooling model • As an investment scheme • As a self-guarantee mutual scheme • As a source of solidarity & coop • As a social welfare system • As a means of wealth distribution6
  7. 7. The Need for Takaful in Kenya • The uninsured Muslim population • A desire for Shariah compliance • The need for ethical process • The impact of great value proposition • Improved service resulting from ethical process • The coop, mutual nature of the Takaful model7
  8. 8. The Takaful Target Market • Takaful as a model for all consumers of risk management products • Satisfies the need for ethical fundamentals • Serves consumers of all faiths8
  9. 9. Wider Demand for Takaful in Africa • Significant Muslim population in Africa • A fit between the Takaful model & African culture • Limited penetration of insurance services in Africa, especially at the micro level9
  10. 10. What is Micro-Takaful? • An insurance systems that offer products to lower end of the market at low costs. • A risk-pooling mechnism designed for the low- income market in relation to cost, terms, coverage and delivery mechanisms. • Micro Takaful: “A mechanism to provide Shariah- based protection to the blue collared, under- privileged individuals at an affordable cost”.10
  11. 11. Characteristics of Micro-Takaful • Simple product design, • Frequent & affordable premium payments, • Packaged uniform benefits • Based on principles of solidarity, • Provide access to protection against risky events that affect the economic well-being of the poor.11
  12. 12. Need for Micro-Takaful • Limited reach of the insurance sector • The need of uninsured masses • The missing Muslim community, both rural and urban • The success of recent attempts, such as CIC insurance • Emerging regional need within the upcoming devolved system • The development Shariah compliant coop societies (CTS)12
  13. 13. Benefits of Microtakaful Opens Results in Helps people Creates feeling Ensures that avenues for Cooperative migration of sustain their of Society joint efforts for approach and benefits at financial well togetherness & benefits at mutual outlook. individual being security large. benefits. level.13
  14. 14. To Succeed… • At least 10,000 members (if life insurance is offered). • Efficient and low-cost collection system. • Well designed products that meet members’ needs but with features that mitigate moral hazard and adverse selection. • Compulsory participation of all insurable members. • Low cost of administration and claims payment. • Professional management and competent technical staff adhering to business standards and insurance principles. • Computer systems able to track and service members, to accumulate data for experience analysis, MIS, etc. • Professional investment management. • Sound reinsurance program. • Scientifically computed and fully funded actuarial reserves. • High benefits to premium payout ratio while maintaining sound financial health.14
  15. 15. Microtakaful Products Most Complex Least Complex15
  16. 16. Opportunities  Provision of Microtakaful products to nomadic communities in remote areas – Livestock covers  The informal sector (locally known as jua kali) employs a big portion of our population. This group still remains unreached  Tapping the large Muslim population in Kenya  Hawkers  Rural communities  Untapped distribution networks – shopkeepers, transporters, community leaders  Devolved government16
  17. 17. TIA Microtakaful Approach17
  18. 18. TIA Microtakaful Approach• Insert the Mpesa 18
  19. 19. 19
  20. 20. 20
  21. 21. TIA Microtakaful Approach• Takaful Bima Poa Cover – A Funeral Expenses cover for the mass market (under development) 21
  22. 22. Challenges • The Industry is currently unregulated • Government and IRA to come up with incentives to encourage investment in this area • Lack of distribution networks due to stringent licensing requirements for insurance agencies by IRA • High cost of running Microtakaful operations • Poverty levels are too high for target communities22
  23. 23. Challenges • Technological challenges – identifying the right platform • Informal schemes: convincing the thousands of informal schemes (chamas) in the embrace Takaful23
  24. 24. Partnerships/Channels • For TIA to succeed in this untapped area, there is need to team up with a number of key players: • Government, especially at County levels • NGOs • MFIs • CBOs • Mosques • Islamic Institutions • Business Community • Foundations • Mobile Phone Operators • Banks24
  25. 25. Conclusion • Microtakaful offers great opportunities to change the lives of communities. • Given the low penetration levels of insurance in Kenya (currently at 3%), this is one area that offers TIA a chance to make a difference in society.25
  26. 26. A new dawn in Eastern Africa11/13/12 26

×