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Regulatory and Marketing Challenges of Takaful in Non-Takaful Markets (Sri Lankan Experience) Presented By Ehsan Zaheed Director / Chief Executive Officer Amana Takaful PLC – Sri Lanka. Presentation Outline. Brief Country Profile Glimpse of - Amana Takaful PLC Regulatory Challenges - PowerPoint PPT Presentation
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Regulatory and Marketing Challenges
of Takaful in Non-Takaful Markets(Sri Lankan Experience)
Presented By
Ehsan ZaheedDirector / Chief Executive OfficerAmana Takaful PLC – Sri Lanka
Presentation Outline
• Brief Country Profile• Glimpse of - Amana Takaful PLC • Regulatory Challenges• Marketing Challenges• Our Approach
Country Profile
An island country in the Indian Ocean off southeast India. History records the coming of the first King – Vijaya in 544 BC
The lucrative spice trade on the island was controlled successively by Arab, Portuguese, Dutch, and British traders from the 12th century.
It became a British colony in 1798 and achieved independence in 1948. it was then called ‘ Ceylon’ and was famous for tea, rubber and coconutsIn 1972 the island was declared a republic, and it adopted the name of Sri Lanka.
Since 1978 the island adopted the Executive Presidential system in the administration of the State
Brief Country Profile
• Total Land Area – 65,610 sq km• Population – 20 m• Age distribution
– 0 - 14 yrs: 5.4m– 15 – 64 yrs: 13.6m– Over 65 yrs: 1.2m
• Literacy Rate: 92.5%• Life Expectancy: 73 yrs• Per capita: US$ 2,014/-
Source: Central Bank of Sri Lanka - 2008 Annual Report
Country Profile ……continued
• Composition of Population (1981 Census)
By Ethnicity• Sinhalese - 73%• Sri Lankan Tamils – 12%• Indian Tamils – 5%• Moors – 8%• Others – 2%
By Sector• Rural - 72%• Urban - 22%• Estate - 6%
Glimpse of Amana Takaful PLC
* The Beginning * Operating Style
* Our Success story !
Our Mission Statement
“Providing total TAKAFUL solutions
within the guidelines of Shariah
and serving all in an admirable manner”
• Commenced Operations in 1999
•Products Range – 7 products•Turnover – LKR 5m•Customer Base – 25
customers•Branches – Nil •Conventional Players in the
market – 12
Our Growth
• Products Range – 30• Turnover – LKR 1 Bn.( USD 9Mn)• Customer Base – 60,000 customers• Branches – 19 (including one in
Maldives)• Conventional Players in the market –
16
Regulatory Challenges
• Sri Lankan Insurance Industry is regulated under The Regulation of Insurance Industry Act, No 43 of 2000.
• Insurance Board of Sri Lanka (IBSL) is the regulatory body .
• There is no separate Takaful Act or any Takaful provisions under the RII Act No 43 of 2000.
Regulatory Framework
Compliance Under “RII Act”
• Has to be a Public Company
• Paid up Share Capital of Rs.100 million per class
• Has a principle officer, a specified officer and actuary
• Maintaining a Technical Reserve (Sec 24).
• Investments in Government Securities (Sec 25(1)).
• Solvency Margin (Sec 26).
• Re-Insurance and acceptability of Re-Insurers (Sec 31 & 50).
• Accounting Requirements (Sec 86).
Regulatory Challenges
• Regulatory framework – not in line with emerging trends
• Rating / Benchmarking by an Independent
Authority
• Lack of investment opportunities
• Government Securities • Equity• Bank Deposits • Corporate Debts,Bonds etc.• Land and buildings• Unit trusts• Mortgage Loans on immovable properties
Regulatory Guidelines for Investments
Marketing Challenges
• Reservations amongst Muslims
• Low awareness & appreciation – both at corporate and individual levels
• Unable to differentiate – leading to confusion in customers mind
• Benefits of Shariah-compliant to the community not conveyed
Continued…
• Low level of market penetration
• Conventional insurance – hyped up (heavy advertising)
• Lack of innovative products (specific customer need)
• Rating / Benchmarking by an Independent Authority
• Marketing / Brand Positioning / Distribution Channels – still on a low scale
• Lack of published data / information on takaful
Our Approach
• ProductsMeeting Specified Customers Need
• ProcessSimple and User-Friendly
• PlacePleasant working atmosphere
• PeopleAlignment with Strategic Business Plans
Products (Based on customer need)
Our Unique – Marketing and Strong Branding initiatives that created Takaful as leading brand
Display at the Colombo Airport
Process (Operating System)
• IT integration in most of the activities
• Issue of SMS alert for policy renewal
• 24 hours – kiosk at our Head office• All data / information – fast
retrieve
24 hours - Kiosk
Place (Pleasant working atmosphere)
People - Takaful HR Model• Sourcing & Recruitment• Orientation & Placement• Job Profile & Performance Appraisal• Training & Development• Recognition & Remuneration• Reward & Motivation• Retention & Re-location (Job)• Retirement (Succession Planning)• Model operated via SOP’s
Thank You
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