The World Bank's Financial and Private Sector/Capital Markets Practice organized a conference on Mutual Insurance and Takaful in a Changing World, which was held on November 12-13, 2012 in Istanbul. The conference was jointly organized with the Turkish Treasury's Insurance Training Center (SEGEM).
The conference provided an overview of mutual insurance structures (including the Christian and Jewish examples) and other hybrid models, presenting feasible ideas for moving forward with Takaful structures. It also explored avenues for further development-oriented opportunities, including the application of Takaful structures to microinsurance markets in emerging economies with large Muslim populations.
Opening the conference, World Bank Managing Director, Mahmoud Mohieldin, emphasized that “The development of the takaful market is critical both for social inclusion as well as for economic development.” Access to insurance is especially important for poor households who are then better able to absorb financial shocks, and manage risks associated with unpredictable events. However, traditional insurance products are inhibiting in some cultural settings. For this reason, the entry of Takaful to insurance markets is to provide access to people who have religious/ethical objections to conventional commercial insurance models.
During the conference, a new World Bank book entitled “Mutual Insurance and Takaful: Alternative Approaches to Managing Risk” was launched. “The book seeks to increase the understanding, appreciation, and discussion of the challenges and solutions needed for the active development and implementation of takaful,” said Serap. “It attempts to develop a hybrid model of takaful - benefiting from existing models established around the world and bearing in mind compliance with Sharia rules and consistency with the culture of Muslim communities.”
The conference brought together global players in the insurance industry, regulators and supervisors, actuaries, and academics interseted in learning about and facilitating the establishment of Takaful operations in their countries.