How would you characterize Solidarity Takaful's position in the market?
Our vision has always been to offer the best takaful products that comply with sharia principles, all the while serving customers in a way they have not been served before. This was not an easy journey, and while the Saudi Arabian Monetary Authority (SAMA) works to help takaful companies, we had to come up with a hybrid model to satisfy the customer and regulator. As a result, the company was established with a unique model—one that would distribute the company's surplus, if there is one, to its customers. Some companies now seek to follow the same model that we created.
How do you distribute the surplus to your customer base, and how is it different from what was done previously?
The company's role is only to take a percentage of what customers paid in order to provide its services, rather than using the entire premium. The model we use is that everyone contributes to our takaful pool, though at the end the company takes 5% for management fees and a 10% performance incentive for its employees. The remainder goes back to policyholders as long as there is a surplus in our portfolio. No one else has this unique model, and we are extremely pleased with how it is working. Our customers are also pleased by how much they get back from their overall annual contribution. Sometimes they use it to renew their policy, and sometimes they simply take the cash.
How have adjustments in the framework by SAMA impacted your operations?
SAMA is working on organizing the competition and avoiding the bad practices that previously existed in the market. It is also working on being fair with both companies and customers. In prior years, customers were not aware of their rights. One challenge SAMA is tackling is aligning the insurance market with Vision 2030. New products are needed in the market, and we see international companies that seek to enter the Saudi market and want to have the right insurance plans while they are here. We received news about a few special products that will be introduced in the market. Through our coordination, we came up with new products that will be extremely helpful for newcomers.
What products have been growing in demand in recent years?
We have 67 products in total. We work to have a great mix in our portfolio, avoiding concentrating on just a few. Some companies do not do this; however, it is key to our success. The market is open, as is competition. We need to use this opportunity to build a balanced portfolio, without depending on anything specific. We have life, marine, engineering, medical, and motor, for example, and some of them are compulsory, while others are commercial.
Do you provide packages to your customers?
We do have packages, though they are limited; offering too many packages could be complicated. We prefer to let our customers select what is most useful for them. We always try to offer whatever they may need and keep their business within our company, though the competition is challenging. People are now more aware of insurance than they were before. They previously believed it was unacceptable and not compliant with sharia. However, they now better understand what it is and the benefits it can bring. They also know there are specifically sharia-compliant products on the market to which they can contribute and still get the same benefits. The industry has flipped 180 degrees. 2017 saw the market expand to nearly USD9.87 billion, and the growth is ongoing. There are still some challenges, especially during this transformation period, but growth should continue. It all depends on how people understand the market.
How well do people understand life insurance?
Life insurance is still a huge challenge in Saudi Arabia, and we are working hard to convince our customers how important it is.