During the opening of Takaful Rendezvous
2014 recently in Kuala Lumpur, Director of Islamic Banking and Takaful Department
of Bank Negara Malaysia, Wan Nazri, had urged the takaful operators to take the
next leap forward to achieve a Takaful 2.0 status. He had even put forward three possible
strategies that could promote the sector to the next level of development,
namely, designing products that meet the critical needs of today, empowering
consumers, and enhancing industry collaboration.
Takaful 2.0 can be seen as a new chapter to
Takaful industry in the next 30 years period compared to the past 30 years
since existence. It shall be among
others, unique, different, and with a world class standard. In the past 30 years, we can generally notice
a situation of “takafulizing” conventional insurance to comply with shariah
requirements. In fact, many claim that
the industry is merely an Islamic insurance instead of pure takaful business. Whatever it is, we shall salute those who had
contributed to the takaful industry (or Islamic insurance) successfully from
day one of its existence despite of numerous obstacles including shariah, regulatory,
technical, human capital as well as marketing concern. As a result, Moslem communities had no more
excuse to opt for conventional insurance.
Setting the right direction is paramount to
ensure that all stakeholders remain focus with end in mind. Nevertheless, I am of the opinion that having
the right people is vital prior to setting the right direction. We may develop the best business or strategic
plan with clear direction but lacking of the right people to drive and execute the
plan may lead to nowhere. Thus, the
aspiration of achieving Takaful 2.0 shall be supported by highly qualified
leaders of the industry. The question to
address now is whether the industry is ready with sufficient supply of the
right talent to lead the industry.
Whilst quantity is a concern, we shall not ignore the quality aspect of it. Therefore, I personally feel that there shall be a robust assessment process in selecting the leaders of the industry. They shall be qualified leaders instead of merely managers of the company. During the process of appointing CEO and CEO-1 team for takaful, the incumbents MUST meet with at least one of the following criteria, namely;
- Ten (10) solid years in insurance / takaful industry at managerial level and above; AND/OR
- Completed relevant professional qualification to insurance / takaful business; AND/OR
- Undergo specially designed coaching program by recognized relevant institutions such as IBFIM.
The main objective is basically to
strengthen the industry with leaders with the right knowledge and capable of
making the right decision for takaful business.
This may also be extended to members of BOD as well as SC with
appropriate adaptation as they are part and parcel of key decision making
process. For those who had sufficient
extensive working experience in insurance with minimal exposure in takaful
business shall undergo a special familiarization and understanding program to
takaful organized by recognized entities by Islamic institutions such as IBFIM. This program will assist the incumbent to
have a better idea on takaful and prepare their mindset to manage takaful
business differently from insurance approach. This includes the concept of
tabarru’at against sales and purchase contract, no marketing approach using
surplus distribution, risk sharing against risk transfer, etc.
In takaful company, currently, we can
easily find professionally qualified actuaries and accountants as they are
stipulated in the regulation. A question
arise whether we need other core functions of takaful operation to be supervised
by relevant qualified professionals.
Core functions of takaful operation commonly comprise of Underwriting,
Claims, Servicing and perhaps Marketing. If we, for instance, conduct a random
surveys pertaining the so-called Underwriters of takaful companies, we will
generally discover that they have been appointed as Underwriters mainly due to
their involvement in underwriting functions for significant number of
years. Nevertheless, we may also come
across several incumbents who have been working in underwriting department for
significant number of years but yet to be “conferred” as an Underwriter status.
There is no absolute barometer to gauge
their level of professionalism as to their readiness to assume the
responsibility as an Underwriter which is one of the core activities of a
takaful company and highly correlated to the end result or bottomline. Therefore, there is a strong demand and
urgency to develop a Takaful Professional certification for core functions of
the business which is unique, different and world-class standard and most
importantly guided by Shariah principles. Authority may, in near future, impose a
requirement to have at least one professionally qualified personnel for each
core activities in takaful company. Currently, there are few professional
bodies such CII, MII, LOMA/LIMRA which provide such relevant
certifications however the learning objectives are not fulfilling the
aspiration of takaful business and shariah principles. As a talent development agency specialized in
Islamic Finance, IBFIM shall take the responsibility to innovate such
certification and support the takaful industry in generating more qualified
professionals to supervise core functions of the business.
In the last two years, IBFIM had embarked on a specially designed coaching program for leaders of takaful industry. It is similar to a ‘Mentor – Mentee’ program and the mentors are mainly senior personnel of takaful industry with extensive relevant working experience and knowledge. Such program can be adopted as one of the pre-requisite criteria prior to the appointment of CEO and CEO-1 team as mentioned under item (3) above. Based on the individual background and experience, the coaching program can be carefully crafted to ensure that the gap is minimize and relevant technical know-how is properly transferred from Mentor to Mentee.
Upon implementation of the above initiatives, I strongly believe that takaful industry is ready to transform itself towards a new generation known as Takaful 2.0 and significantly differentiate itself from insurance operation.
