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MassesGlobalLLP
Ajmal Bhatty, CEO & Managing Partner, MassesGlobal
CONFIDENTIALNOTFORGENERALDISTRIBUTION
Takaful-anewmarketforUKmutuals… insurancebasedonethicalprinciples
B r e a k o u t S e s s i o n @ 1 5 . 0 0 Mond a y , 1 4 t h O c t o b e r 2 0 1 9
Financial&InsuranceAdvisoryFirmLondon,Dubai
W:https://www.massesglobal.orgE:[email protected]
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MassesGlobalLLP2
Takaful is Insurance …… ..... but its norms are closer to Mutuals
u Theinsuredpaypremiumsintoamutualfundtoprotecteachotheragainstinsuredperils.
u TheShareholdersenablethismutualitytotakeplaceoncooperativeprinciples.
u Themutualityandcooperativeprinciplesareabout equityandfairnessinthevalue-chainofsocialgoodness.
u TheDNAofTakafulandEthicalFinanceistomaintainaBalancedFinancialEnergyforthegoodofPeopleandPlanet;thefinancialenergybeingtheProfitmadeinfairandequitableways.
TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
• Customerspaysmallamounts(premiums)forbigamounts(claims)andshareholdersmakeprofitifclaimsarenotmany,… like gambling
Speculation(Maysir)
• Aclaimmayormaynothappen.Premiumsbecomethepropertyofinsurancecompanyinexchangeforapromisetopayifaneventhappens
Uncertainty(Gharar)
• Abigpartofreturnoninvestedpremiumscomesfrominterestandfrombusinesses/industriesnotalwaysgoodforus(alcohol,smoking,harammeat,pornetc)
Interest(Usury–Riba)
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Conventional Insurance Why it is unacceptable ?
TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
EDINBURGHDECLARATIONSHAREDVALUESFRAMEWORKFORETHICALFINANCE(UKIFC)
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SOUNDMORALPRINCIPLES(STEWARDSHIP)
WealthisatrustfromGod
LOVEOFTHENEIGHBOURGenerosityandaltruism
towardsothers
SUSTAINABILITY&PURPOSEFULNESSMoralobligationtoplacetangiblesocietalpracticesandprocessestopreserveearth’s
limitednaturalresources
JUSTICE&EQUITYFairness,equityandjusticeinone’sfinancialdealings
COMMONGOODEconomicactivityseekingtopromotemutualbenefit
HUMANFLOURISHINGPromotingandprotectingprosperity
beyondthefewtothemany
SHAREDVALUES
Commontoall
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MassesGlobalLLP
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AVOIDINGUSURY(GREED)MoneyisGod-givenenergyforthe
collectiveserviceofall,andnotjustfortheSelf,inmakingourworldabetterplace
MUTUALITYAsystemthatchannelsfinancial
energynotjustforprotectingeachotherbututilizingcapitalforthe
benefitofothers
RESPONSIBLEINVESTINGMoralobligationtoplacetangiblesocietalpracticesandprocessestopreserveearth’s
limitednaturalresources
TRANSPARENCYFairness,equityandjusticeinone’sfinancialdealingsandmakingprofitinthemostequitableways
COMMONGOODEnablingindividualstochannelcorporatefinancialenergynotjustforprotectingtheirownlivelihoodbutalsothePlanet
RISKSHARINGAffordablewaysofprotecting
livelihoodtomaintainprosperityoffamiliesandcommunities
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TakafulForUK|ASupplyGap|Under-servedDemand
TAKAFUL’SROOTSARECOMMONANDFOUNDINALLRELIGIONS
ETHICALVALUES
Commontoall
MassesGlobalLLP
TAKAFULÐICALFINANCEDNA=BALANCEDFINANCIALENERGY
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AVOIDINGUSURY(GREED)MoneyisGod-givenenergyforthe
collectiveserviceofall,andnotjustfortheSelf,inmakingourworldabetterplace
MUTUALITYAsystemthatchannelsfinancial
energynotjustforprotectingeachotherbututilizingcapitalforthe
benefitofothers
RESPONSIBLEINVESTINGMoralobligationtoplacetangiblesocietalpracticesandprocessestopreserveearth’s
limitednaturalresources
TRANSPARENCYFairness,equityandjusticeinone’sfinancialdealingsandmakingprofitinthemostequitableways
COMMONGOODEnablingindividualstochannelcorporatefinancialenergynotjustforprotectingtheirownlivelihoodbutalsothePlanet
RISKSHARINGAffordablewaysofprotecting
livelihoodtomaintainprosperityoffamiliesandcommunities
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PEOPLEPLANETPROFIT
GOODFORALL
TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLPRESTRICTED CIRCULATION ONLY
1. Asia:8marketsMalaysia,Indonesia,Brunei,Pakistan,Bangladesh,Afghanistan,SriLanka,Maldives
2. MiddleEast:8marketsUAE,SaudiArabia,Kuwait,Qatar,Oman,Bahrain,Jordan,Lebanon
3. Africa:9marketsEgypt,Tunisia,Morocco,SouthAfrica,Kenya,Somalia,Sudan,Nigeria,Gambia
4. Others:2marketsTurkey,Mauritius
Takaful industry worldwide
TakafulForUK|ASupplyGap|Under-servedDemand
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MassesGlobalLLP
u Global:GWPUS$26bn,AUMUS$43bnin2016.
u IslamicFinanceAUMsUS$2.2Trillionacross56countries,2016.
u IslamicFinancepoisedtogrowtoUS$3.8trillionby2022.
u UK,withitspost-Brexitdriveforglobalfinancialconnectivity,isexpectedtoplayasignificantroleinthisdevelopment.
RESTRICTED CIRCULATION ONLY
Takaful industry worldwide
TakafulForUK|ASupplyGap|Under-servedDemand
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u TheUKhas3m+Muslims(approx.1.53madults,1m<15)
u UKMuslimcommunityspendsanestimatedUS$4.5billionpaonlifeandnon-lifeinsuranceproducts(A2004UKsurvey).
u 9%ofMuslimsexclusivelyuseIslamicfinance,27%usesomeIslamicfinanceand45%willconsiderIslamicfinanceifpriceandserviceisright(MuslimCouncilofBritainResearch)
u Iftakafulisoffered,asignificantproportionofUKMuslimpopulationwouldchooseTakafulovertraditionalinsuranceproducts(IslamicInsuranceAssociationofLondon)
RESTRICTED CIRCULATION ONLY
Takaful For UK
TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
Takafulisboundbasedonsamescientificrulesandactuarialapproaches:
mortalityratesmorbidityratesaccidentratesclaimsexperiencediscountedcashflowspriceofriskevaluationofliabilities.
Takaful’s Technical Similarities
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TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
TakafulworksbecauseofitsDNAofSocialGoodness.Anycompromiseonthisrenderstakafulsameasconventionalinsurance.TopreservethisDNA,aTakafulstructurewithinUKMutualshouldhavethefollowing:1. Interest/debttobeavoidedfrominvestmentsbackingtakafulbusiness2. Toinvestaccordingtostatedscreeningcriteriainassets,businessesand
instrumentsthatdon’thavenegativeimpactonsocialgoodness.3. Alldocumentationandclientfacingprocessestobesimpleandclear4. Distributionofunderwritingsurplusandinvestmentreturnstobefair
andequitable5. Products,investmentfundsandsurplusdistributiontobealignedwith
statedTakafulprinciples.6. RegularTakafulauditstoensurecompliancewithtakafulprinciples.This
isinadditiontothefinancialauditsandactuarialvaluations.
Takaful Specificities
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TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
Takafulisdrivenbytheneedtoprovideprotectiononmutualprinciples.WithoutShareholderCapitalthiscooperativeapproachisdifficultinthisdayandage;buttakafulstructurescanbebuiltwithoutcapitalifthesystemcansupportbusinessviabilityandtechnicalsolvency.So,TakafulcanworkwithorwithoutShareholdercapitalforUKMutualsinthefollowingmanner:1. UKmutualstooffertakafulproductsadheringtotakafulspecificities.2. Investorcapital(viaDeferredShares)toinvestandsupportamutual
companyforanembeddedtakafulstructure,UKregulationspermitting.3. AmergerofsomeUKmutualsbackedbyInvestorCapitaltoformoneor
morelargeranddynamicmutual.
Post-Brexit,(2)and(3)maybeawelcomedapproachandsupportedbytheUKgovernment.
Ways of Embedding Takaful Within UK Mutuals
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TakafulForUK|ASupplyGap|Under-servedDemand
MassesGlobalLLP
Ajmal Bhatty, CEO & Managing Partner, MassesGlobal
CONFIDENTIALNOTFORGENERALDISTRIBUTION
ThankYou
B r e a k o u t S e s s i o n @ 1 5 . 0 0 Mond a y , 1 4 t h O c t o b e r 2 0 1 9
Financial&InsuranceAdvisoryFirmLondon,Dubai
W:https://www.massesglobal.orgE:[email protected]
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