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have reached the dimensions that are sometimes considered destructive in the financial
services sector, this transformation will continue to be an important part of our social
and economic life.
They further elaborated that as in all fields, the use of FinTech in Takaful has become a
necessity. Insurance will become impossible unless the FinTech is utilized, and new
developments are embraced. FinTech can be used to explain the difference and essence
of Takaful and make it more accessible to consumers. In the FinTech ecosystem, people
can see clearly and recognize the major differences between Takaful and conventional
insurance.
Two experts from Saudi Arabia commented that information technology is playing a
vital role in all industries and Takaful is no exception. They say the insurance industry
in Saudi Arabia is relatively young and significant investment is required for it to grow
in all aspects. There is presently increasing awareness in the market for companies to
invest in new technologies, including FinTech, for them to protect their positions,
expand market share and have competitive edge.
10. How do you foresee the future of the Takaful industry?
Over 80% of the experts interviewed are optimistic about the future of the Takaful
industry. They see a continuous growth and expansion. Nevertheless, they are cautious
about the pace of the growth and several aspects that need to be enhanced such as
leadership, quality of the human resource, innovative original products, investment in
technology and competitiveness.
Three experts from Malaysia explain that the global Takaful industry has witnessed a
remarkable double-digit growth in the last decade, for instance, recording 19% growth
between 2009 and 2010. Nevertheless, Takaful has not grown at levels to keep pace with
the growth in Islamic banking and finance. Takaful is severely underpenetrated,
especially in Family Takaful segments. The experts commented that the Takaful
industry success lies in fixing a range of the following areas: revisiting the objectives of
its establishment; the ethical impact of Takaful product must be understood and visibly
seen to positively impact the daily lives of people, business and investors and; the value
proposition of Takaful needs to be more apparent and distinct from the conventional
insurance. The three Malaysian experts suggest the following priorities for the industry
to embark on to realise the full potential of Takaful:
a. the presence of players with deep Shari'ah knowledge within our domestic
Takaful and Re-Takaful companies, and an entire Islamic finance ecosystem that
can be tapped into to really push the frontiers.
b. the Takaful industry needs to conduct itself in a way that alleviates, not add, to
the hardship of customers. The principle of kafalah emphasising mutual help and