With the global takaful market poised for rapid growth over the next decade, the focus for players is shifting towards creating an efficient operating model. To meet this need, takaful core systems are increasingly offering the flexible architectures of modern policy administration products.
Once a niche product sold largely by small local operators, takaful is rapidly being embraced by multi-national financial services firms with sophisticated product differentiation and distribution capabilities. The global takaful market is predicted to grow to US$7.39 billion by 2015, with the greatest growth in the Middle East and Southeast Asia. In a new report, Policy Administration Systems for Takaful: A Global Solution Spectrum, Celent examines the issues that are shaping this market worldwide and provides detailed profiles of the available core systems.
As Islamic insurance product offerings mature, new questions have emerged for insurers seeking to enter this area and for the solutions providers they partner with. What is the best operating model? How should the policyholder surplus be calculated? What will the consequences of increasing regulation and standardization of Islamic financial products be?
As insurers move towards answering these questions, technology will play a critical role in facilitating the business. "Once the operating model has been chosen, continued harmonisation of takaful rules will place pressure on core solutions to adapt to this ever-changing environment," says Catherine Stagg-Macey , senior analyst in Celent's insurance practice and coauthor of the report. "To meet this challenge, insurers must ensure their core solutions are highly flexible."
This report is intended as a single source for insurers evaluating takaful core systems. It includes key criteria for a core takaful system investment and is one of the most detailed guides available on vendor solutions. Vendor profiles include information about company background, geographies served, client base, product features, lines of takaful supported, technology stack, Wakala/Mudharaba support, and language capabilities. The Middle East, Malaysia, Africa, and the UK are the major geographical regions served by the 14 solutions profiled. The report also provides graphics with comparative views of vendors' Wakala or Mudharaba product support and customer bases for quick reference.