Download english - Takaful

INTRODUCING TAKAFUL IN NON - TAKAFUL
MARKETS: THE CIC KENYA EXPERIENCE
Presenter:
Steve Muia
Business Development Manager
The Co-operative Insurance Company of Kenya
Limited (CIC Insurance)
Kenya, East Africa
Email: [email protected]
Website: www.cic.co.ke
Summary of Presentation
 About Kenya
 Demographics
 Overview of Insurance Industry in Kenya
 CIC Kenya
 Takaful
 Challenges
 Opportunities
 Conclusion
About Kenya
 Location: Eastern Africa, bordering the Indian Ocean,
between Somalia and Tanzania
 Area:
Total: 582,650 sq km
Land: 569,250 sq km
Water: 13,400 sq km
 Coastline:
536 km
Demographics
 Population: 39,002,772
 Age structure:
0-14 years: 42.3%
15-64 years: 55.1%
65 years and over: 2.6%
 Median age:
total: 18.7 years
male: 18.6 years
female: 18.8 years (2008 est.)
Demographics
 Population Growth Rate: 2.691% (2009 est.)
 Birth rate: 37.89 births/1,000 population (2008
est.)
 Death rate: 10.3 deaths/1,000 population (2008
est.)
 Sex ratio:
 Under 15 years: 1.01 male(s)/female
 15-64 years: 1.01 male(s)/female
 65 years and over: 0.84 male(s)/female
Religions
 Protestant 45% (17.6 m)
 Roman Catholic 33% (12.9m)
 Muslim 10% (3.9m)
 Indigenous beliefs 10% (3.9m)
 Other 2% (780,000)
 Note: A large majority of Kenyans are Christian, but
estimates for the percentage of the population that
adheres to Islam or indigenous beliefs vary widely
Economy
 The regional hub for trade and finance in East Africa
 GDP grew an estimated 2.1% in 2008 – projection 7%
Overview of Insurance Industry
 Players: 43 companies (2008)
 Gross industry premium Kshs. 48.1 billion (2007)
 Assets Kshs. 130 billion (2007)
Insurance Companies in Kenya
Regulatory Framework
In Kenya, the insurance industry is governed by the
Insurance Act Cap 487 , regulated and supervised by
the CEO of the Insurance Regulatory Authority (IRA) .
The mandate of the Authority is to ;
 Regulate, supervise and develop the insurance industry
in Kenya.
 Administer the Insurance Act and advise the
government on policy matters insurance.
 Protect the interests of policyholders.
The policy and regulatory framework has no
provisions pertaining to Islamic Insurance.
Act is neutral
CIC Kenya
 Established in 1978
 Staffing - 151
 Branches - 14
 Asset base - Kshs. 3 billion
 Gross premium: Kshs. 2.4 billion
 CIC is the 6th largest insurance company in Kenya
Takaful
Idea Conception
 Idea mooted in 2004.
 Little/No progress made
 Picked up in 2005 with formation of a technical team
from CIC Kenya and a consultant
 Concept development
 Networking
 Documents
 Model
 Systems
 Staffing
Key Issues
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Understanding the concept
Gauging regulator’s reaction
Model development
Islamic Leaders – Supreme Council of Kenya Muslims
(SUPKEM) and COI
Research on viability – target areas with large pop of Muslims –
fear of leakage to competitors/cost/
Takaful Advisory Board
Operational guidelines – underwriting, finance, investment
Retakaful
Marketing Plan/Strategy/Distribution
Policy documentation
Systems – IT and operational
Model
Challenges
 Lack of regulatory framework
 Shariah compliance
 CIC Board
 Capital requirements
 Window or fully fledged takaful company
 New concept – profit sharing, etc
 Language/Terms
 Religious and cultural – polarization (Islam phobia)
 Technology
Challenges
 Operational issues – investment vehicles
 Staff training
 Board/Advisory panel
 Accounting model
 Acceptance
 Retakaful
 Which model?
 Rating
 Anticipated competition
Opportunities
 New concept
 Large population that is not insured
 Alternative – Kenyans always ask why insurers never
refund premium
 Islamic banking
 Regional expansion – EAC, Somalia, Ethiopia, Djibouti
Country Figures (2009 est) Opportunities
Country/Year
2009 Population
(in Millions)
Kenya
39.002
Tanzania
43.739
Uganda
32.710
Rwanda
9.998
Burundi
8.303
Ethiopia
82.545
Djibouti
0.502
Somalia
8.863
Current Status
 CIC is partnering with local investors to set up a
Takaful insurance company.
 Partnering with local investors to purchase 30% stake
in a newly registered venture - Takaful Insurance of
Africa
Conclusion
 CIC is optimistic that the Takaful concept will pick
well in the market and that our partnership with
Takaful Insurance of Africa will bear fruit to the cooperative movement.
 We shall bank on the international co-operative
community to give us the necessary support in rolling
out Takaful in Kenya.
 Thank you and may God bless you