The General Arab Insurance Federation (GAIF) hosted its 26th General Industry Conference (GIC) in Damascus in May 2006, deliberating on the theme “Modernising and Developing the Arab Insurance Industry”. Our editorial consultant, Hafiz Mohamed, was there to report on its proceedings.
Conference participants, comprising 750 delegates and speakers from both conventional insurance and takaful companies, heard Syrian Minister of Finance Dr Mohammad al-Hussein point out that Arab countries accounted for only 0.25% of world insurance despite the fact that Arab countries undertook massive project investments over the last few years. This means that the Arab insurance industry does not exceed US$8.25 billion in annual premiums. Currently, an individual in an Arab country spends US$10 a year on insurance compared to the worldwide average of US$300.
Dr Mohammad attributed the low insurance spending to the general lack of insurance awareness and to overseas investments made by Arab countries. In order to have a mature and stable industry, he said, companies had to find a way to keep more premiums within the country’s economy.
He considered the insurance sector to be one of the most vital sectors in the economy, noting that the sector was experiencing accelerated development in the world. On the Syrian Government’s part, he said that the government’s commitment to privatisation was evident with private insurance companies already in operation.
More Professionalism Needed
Mr Abdul Khaliq Khalil, Secretary General, GAIF, said that the organisation would continue to play its role as an insurance federation for Arab countries and deepen its involvement with companies and professionals. He applauded the work done so far by Arab insurance companies and encouraged closer working ties among them.
But he also agreed with Dr Mohammad that more could be done, particularly in improving solvency and increasing the number of qualified staff. He also called for more professionalism as well as a strong reinsurance programme.
Delegates’ Views
Many delegates saw the conference as a platform for Mena insurance experts and practitioners to come together to address challenges as well as discover opportunities. Some delegates believe that, through such conferences, industry players could help to enhance the development of the insurance industry and give the industry the prominence it deserved.
Informing customers about contractual rights and obligations were on the list of suggestions on how to increase public awareness of insurance. Delegates also highlighted the need to shift from a culture of accepting fate to one of insuring.
Others saw takaful playing a bigger role in regional insurance activities, particularly since takaful mobilises long-term funds, provides risk protection and supports national economic growth.
IFIITC Envisions Horizons for Takaful
On the heels of the GIC, the International Federation of Islamic Insurance and Takaful Companies (IFIITC) held its 10th general meeting. The theme of the one-day event was “Towards New Horizons for Takaful”.
IFIITC President, Mr Osman El Hadi Ibrahim, noted how rapidly the takaful industry, which had only nine companies in 1992, had grown. Currently, there are over 80 takaful companies worldwide, including takaful windows.
He also noted that present models adopted by takaful companies are more sophisticated – not just wakalah and mudharaba – and called for the continuing development of these models through the joining of efforts and expertise by industry players. He stressed the importance of co-operation and co-ordination as well as the retakaful in the sector.
With respect to co-operative insurance, he called for more Shariah-based research and development.