zamani abdul ghani : significant trends surrounding the takaful industry opening address by mr zamani abdul ghani, deputy governor of the central bank of malaysia, at the 3rd international convention on takaful and retakaful, kuala lumpur, 29 august 2007. * * * bismillahirrahmanirrahim, distinguished speakers, ladies and gentlemen. assalamualaikum w. r. t. and good morning. i am indeed very pleased to be here this morning to welcome you to kuala lumpur. alhamdulillah, we have among us today distinguished market players, regulators, scholars as well as participants from many parts of the world, including brunei, thailand, indonesia, singapore, bangladesh, sudan, nigeria, pakistan, kuwait, egypt, uae, bahrain, jordan, turkey and many others. on behalf of bank negara malaysia, i wish to congratulate the islamic banking and finance institute malaysia ( ibfim ) and the malaysian takaful association ( mta ) for their efforts in organizing, for the third consecutive year, this international convention on takaful and retakaful. let me at the outset reiterate the importance of this convention as a source of collaboration for ideas, sharing of knowledge and exchange of experiences for the continuous development and improvement of the takaful and retakaful industry. in few days time, on 31st of august, malaysia is celebrating the 50th national day and therefore, the organization of this 3rd convention on takaful and retakaful is indeed very special. the convention and independence celebration have similarities in their core values. both cherish the spirit of alliance, tolerance and togetherness. both also share strong call for “ muhasabah ” or reflection – to strategize for the future by reflecting on past experiences. my address today will touch on these two aspects. i will share my observations on the significant trends surrounding takaful industry in recent years as well as key focus areas for the industry moving forward. finally, i will highlight a couple of major initiatives undertaken by malaysia to further strengthen as well as expand the breadth and depth of the takaful and retakaful industry. high growth potential of global takaful market as a starting point, allow me to share with you five major trends in global takaful industry over the past few years. these trends have significant bearing on the development of this industry moving forward. first, the takaful and retakaful industry

products. i am sure you will also be briefed on the development of the sukuk market in malaysia later on. fourth, the increase in outsourcing and white labelling activities. competitive elements and strong demand for takaful require takaful players to constantly search for solution towards greater efficiency and shorter time to market. there is strong potential for strong and experienced takaful players to leverage on their competitive strengths to be an ally of other players, especially from a new market, by becoming either outsourcing partner or white labelling provider. fifth, as seen in international islamic banking scene, there was growing participation of major conventional global players in the takaful and retakaful industry. in malaysia, the strategy to encourage alliances and collaborative efforts between local and foreign players has resulted in a positive outcome with the licensing of new takaful operators consisting of joint ventures and consortia of local and foreign players which have registered early strong performance. in addition, the other 100 % - owned malaysian takaful operators are now actively looking for strategic partnership with foreign financial institutions so as to facilitate their expansion abroad and exploit opportunities in untapped markets. these five trends point to one direction – that the industry will continue to present high growth potential with growing demand, increasing competition, supported by greater sophistication and innovation of products and services. while the double digit growth is commendable, the takaful industry is still small i. e. constituting 6. 3 % in terms of assets of the insurance industry. the success of takaful in the future rests on the ability of the industry to collectively position itself strategically to meet the needs of the economy and the ability to be competitive and innovative. global takaful strategies let me now turn to t he strategies for the global takaful industry moving forward, which essentially is the theme of the convention. the key strategy is to amplify a simple, but yet a powerful concept, which is the core concept of takaful itself, that is, collaboration. that is in consonance with the quranic verse from surah aali - imran verse 103's quote : " and hold fast, all together, by the rope which god ( stretches out for you ), and be not divided among yourselves and remember with gratitude god's favour on you … " end of quote. allow me to expound a few angles on this new collaborative framework. the first area is talent development a key