TAKAFUL Potentials and Opportunities in Bosnia Herzegovina Enver
TAKAFUL Potentials and Opportunities in Bosnia &Herzegovina Enver Avdić, Mr. sci. in insurance and actuary
Content Country facts, Bosnia and Herzegovina Structure and Volume of Financial sector in 2018 Insurance sector Establishment of Takaful insurance company Potentials and opportunities
Country facts Area: 51, 197 m 2 Population: 3. 5 million Median age of population: 41. 3 years GDP/capita (PPP): EUR 8. 800 Unemployment rate: 18. 40% Current a/c balance (in % of GDP): 4. 2 Government gross debt balance (in % of GDP): 33. 8 R&D expenditure balance (in % of GDP): 0. 2
Country facts Competitiveness rankings Share in gross value added Export Easy of doing business index (World bank) 89 out of 190 Global competitiveness index (WEF): 91 out of 140 Industry: 24% Construction: 4. 7% Services: 46% Agriculture: 6, 9% In % of GDP: 40 Top 3 export destinations: ◦ Germany ◦ Croatia ◦ Italy
Structure and Volume of Finance sector in 2018
Insurance sector-legal aspect Regulatory bodies: ◦ Insurance agency of Bosnia and Herzegovina ◦ Supervisory agencies of Federation Bi. H and RS Laws regulating insurance business in Bosnia ◦ Law on privates insurance companies as lex specialias ◦ Law on MTPL ◦ Law on intermediary in insurance ◦ Law on obligations as lex generalias ◦ Corporate law Passed laws on insurance are in accordance with laws in European Union and aplicable regulatives, Solvency II
Insurance sector in numbers 16 nonlife 26 insurance companies 10 composite 4453 984 • employees • licensed agents and brokers
The value of insurance market in 2018 Total premium 364 M EUR Total revenue 385 M EUR
Premium growth: 2006 -2018
Product portfolio structure in 2018 Life; 73 M EUR; 20, 11% Nonlife; 291 M EUR; 79, 89%
Premium vs. Claims in 2018 Total premium 364. 464. 922 EUR Total claims 142. 715. 415 EUR Ratio 39, 16% 38%-NL 42%-LI
Insurance market performance in 2018 Bosnia and Herz. Capital Revenue Profit 220 M EUR 385 M EUR 30 M EUR Profit /Capital/Revenue 13, 64% 7, 79%
Establishing Takaful company-legal aspect Shareholding company, limited Decision on type of licence : nonlife or life Preparation of neccessary documentation and acts accoring to the procedure requirement set by Supervisory Agency Creating acts out of autonomous right (terms and conditions) in reference to takaful requirments Appointment of management
Min. Guarantee fund/capital requirement Nonlife insurance Linfe insurance • 5. 000, 00 EUR • 3. 000, 00 EUR
Potentials and Opportunities Real need for halal insurance- no takaful company yet Respectable size of insurance market - 364 mill EUR annually Steady growth of the market for last 20 years Low market penetration (premium/GDP-1, 92%) Existing active clients of conventional insurance companies aware of value of islamic way of insurance Particular potentials in products with low share such as health, accident, property and life insurance.
Potentials and Opportunities Passive clients who consider conventional insurance as haram Sound legal environment and continuous improvemnet Availability of qualified professionlas to leave conventional companies and join takaful Possibility to actively cooperate with islamic bank and islamic comunity Microtekaful Model for other neighbored countries
Contact info for interested partner: Mr. Enver Avdic, project manager +38761491040 avdic. enver@gmail. com invest@tekaful. ba www. tekaful. ba
- Slides: 17