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Press Release > 2017

The IFSB and the World Bank Jointly Publish Book on “Realising the Value Proposition of Takāful Industry for a Stable and Inclusive Financial System”

Date posted: 23 October 2017

23 October 2017, Abu Dhabi / Washington – The Islamic Financial Services Board (IFSB) and the World Bank Group (WBG) are pleased to announce the launch of a joint IFSB-WB publication titled, “Realising the Value Proposition of Takāful Industry for a Stable and Inclusive Financial System.” The joint publication is being distributed during the IFSB Summit 2017, held in Abu Dhabi on 22-24 October 2017.

The publication aims to become a key resource for industry practitioners and stakeholders in the takāful (Islamic insurance) sector. It aims to contribute to discussions on the outlook of the takāful industry and its potential for enhancing risk coverage of individuals and corporates, promoting financial inclusion, and supporting the growth of the Islamic finance industry globally. The publication also provides insightful deliberations on existing takāful models and associated challenges in regulating this sector, ways to improve delivery channels and increase takāful penetration in various markets as well as developments in risk management and corporate governance practices at the national and international levels.

Mr. Zahid ur Rehman Khokher, Acting Secretary-General of the IFSB, stated, “This is the second publication successfully published as a result of the IFSB’s long-term collaboration with the WBG and summarises the discussion held at a joint IFSB-WBG-Turkish Treasury conference in Istanbul, Turkey in May 2016”. He further stated that “this book complements the IFSB’s existing work on the takāful sector which covers standards and guiding principles on corporate and Sharīʻah governance (IFSB-8 and IFSB-10), solvency requirements (IFSB-11); risk management (IFSB-14) and most recently, guiding principles for retakāful (IFSB-18) as well as guidance notes and working papers covering this sector”. “Integration across various segments of Islamic finance”, Mr. Zahid emphasised, “necessitates a focus on cross-sector dimension and need for consistent development in takāful, Islamic banking and Islamic capital market sectors that could bring synergy and resolve many of the structural problems being faced by the industry”.

According to Mr. Abayomi Alawode, Head of Islamic Finance at the World Bank, “This publication is part of our ongoing effort to enhance understanding of various segments of the Islamic finance industry. We feel that the focus on Takaful is timely, given its potential role in expanding access to insurance services and helping the poor to manage unexpected shocks”. He added that “we hope that this book will be useful to policy makers, regulators and development practitioners who are committed to developing the Takaful industry and expanding its contribution to risk management and poverty reduction in developing and emerging markets”.

Among the key points of discussion in the book include the global trends and policy developments in the takāful sector, regulatory developments, risk management and governance issues, microtakāful and its role in financial inclusion, retakāful and its key challenges and also the way forward for the industry. The contributing authors in the publication are: Prof. Habib Ahmed, Dr. Alberto G. Brugnoni, Mr. Peter Casey, Ms. Serap O. Gonulal, Mr. Zainal Abidin Mohd Kassim, Mr. James A. Smith and Dr. Ludwig Stifl.

The softcopy of the book is downloadable via the IFSB website, www.ifsb.org.

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