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Transcript 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
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