Takaful firms 'must gear up for future challenges'

The high growth rates reported in the global takaful industry cannot be sustained forever and companies must gear up for the challenges ahead, said a top Bahrain-based expert. Solidarity chief executive Sameer Al Wazzan was speaking at the opening of a two-day takaful seminar at the Elite Suites. The event was organised to bring senior executives from across the world to share experiences, discuss developments and address the challenges that lie ahead. The second International Co-operative and Mutual Insurance Federation's (ICMIF) Takaful Network Seminar is being hosted by Solidarity Group, a member of the Ithmaar banking group. 'Many of our companies were formed during the boom years on the basis of feasibility studies and business plans drawn up on the basis of higher rates on economic growth in target markets,' said Al Wazzan. 'The recent global financial crisis was not only unexpected, but the extent of the downturn could not be anticipated,' he said. 'Consequently, it is very important for us, as takaful practitioners, to examine not only growth prospects, but also the possible constraints and hurdles which our industry may face under current financial and economic conditions,' said Al Wazzan. 'Any over optimism needs to be scaled down and practical issues which have surfaced need to be recognised and dealt with in realistic terms. 'We must, collectively, debate these issues, understand the realities and work to overcome the challenges we will face,' he said. Al Wazzan praised the role played by the Central Bank of Bahrain (CBB) in contributing to the development of the region's takaful industry. 'The CBB has been a pioneer in this region in promulgating regulations specifically covering takaful,' he said. 'This has spurred growth in the number of takaful and re-takaful companies established in Bahrain, as well as the level of business generated,' he added. CBB Financial Institutions Supervision executive director, Abdul Rahman Al Baker delivered a presentation entitled 'Takaful Industry - Challenges and the Way Forward.' Al Baker presented an overview on the takaful industry from both the global and national perspectives. He also discussed the main factors for growth of takaful, the current and future challenges, and the way forward. --TradeArabia News Service