TAKAFUL ( ISLAMIC INSURANCE ) BLOG

Kazakhstan is the central hub of Islamic finance for CIS countries

2011-10-06T11:02:00.001+05:00

Press Release

Kazakhstan is the central hub of Islamic finance for CIS countries: Zubair Mughal
International Islamic financial Institutions are ready for doing investment in Kazakhstan

(Lahore/Kazakhstan, 24th September, 11) They are many chances of investment in Kazakhstan regarding International Islamic Banking and financial institutions are in looking on different options for investments in Kazakhstan because the world sees the Kazakhstan a central hub for Islamic banking and finance for CIS countries. These are the views of Muhammad Zubair Mughal the Chief executive officer of Al-HUDA centre of Islamic banking and economics, which he expressed in his speech in the International finance forum that is held in the Astana the capital of Kazakhstan in this week. In which the Finance minister Mr. Zhamishev Bolat of republic of Kazakhstan, the vice member of the chancellor of Prime Minister Mr. Tolevkhanov Dauren, the member of the area of department of strategic progress and research of President Administration Mr. Sadvawasov Darmen, the senator of the Kazakhstan Parliament Mr. Yensegenov Sarsenbag, the chairman of the committee of national bank of republic of Kazakhstan Mr. Nurpeissov Darkhan, the executive director of Zakat fund Mr. Alpysbay Edige and include International experts. The theme of the conference was to make fruitful plan and procedures for the development and expansion of Islamic finance in Kazakhstan.
By addressing to the forum, Mr. Muhammad Zubair Mughal presented the origin and starting of Islamic banking and finance in Pakistan in the form of case study that how Pakistan make fast success in Islamic banking in a short period of time. They said that Kazakhstan while doing Islamic banking and Sukuk should also utilize and use the Takaful, Islamic fund, Islamic microfinance and Islamic Reits side by side and for the development of infrastructure the government and Kazakhstan should issue Sukuk in International market so that the Kazakhstan is recognized as the Islamic Financial state in the international market.
He said Kazakhstan is one of the ninth biggest countries of world which holds the 70% population of Muslims from the 16.5 million populations, that is the sign of huge market of Islamic banking and finance. Due to which by making the Kazakhstan the model of Islamic Finance for the rest of CIS countries so that the implementation of Islamic banks and finance their can easily be done. Especially in Central Asian countries because there the population of Muslims is very much huge like Kazakhstan 70%, Uzbekistan 97%, Azerbaijan 99%, Turkmenistan 94%, Kyrgyzstan 86%, Tajikistan 84% is Muslim population. That is the clear sign of the progress and demand of Islamic banking there.

2011-09-26T13:29:00.001+05:00

Islamic Microfinance Network ( IMFN ) now unlock for membership worldwide

2011-07-25T11:16:00.001+05:00

July 25, 2011
Islamic Microfinance sector is currently progress aggressively by addressing of deficiencies and challenges faced by the traditional Microfinance industry, right now near about 300 Islamic Microfinance Institutions are operating around the globe effectively, due to tremendous performance of Islamic Microfinance Institutions, now conventional Microfinance Institutions are opting Islamic system for poverty alleviation at large.
For addressing all the challenges and opportunities Islamic Microfinance, Islamic Microfinance Islamic Microfinance Network (IMFN) has launched in 2010 with the aim to provide a unique and common platform for National and international Islamic microfinance institutions (MFIs). The activities of IMFN includes coordinate the efforts of its members in jointly addressing poverty alleviation, establishing best practices in Islamic microfinance, developing guidelines and the implementation that comply with Shariah law.
Now the membership is being opened for nationally and internationally organization who are serving in the sector of Islamic Microfinance. The membership is available who are practicing Islamic Microfinance in their operations as Permanent members while other conventional Microfinance Institutions are also welcome as observers members, so that they enable to learn about Islamic Microfinance System. It is not only for the institutions while the academician and Advisor also becomes the member of this network.
Zubair Mughal – Chief Executive Officer , Islamic Microfinance Network ( IMFN) said that it is common responsibility of the industry stakeholders to address the things at one platform for brush up and standardization with the objective toward poverty alleviation, he also said that Almost 17,000 million people live below the poverty line in the world of which 44% live in the Muslim majority countries which become the prime reason behind Islamic Microfinance. At the moment 300 Islamic Microfinance Institutions in 32 countries including: Indonesia, Kenya, Afghanistan, Bangladesh, Sri Lanka, Yemen, Egypt, Sudan, Tanzania, Mauritius, South Africa, Malaysia and Pakistan are working on Poverty alleviation. Due to its more productive role, Islamic Microfinance is gaining popularity in those countries where Muslims are in minorities.

Islamic Microfinance can work with all the Microfinance Models of the world: Zubair Mughal

2011-07-15T10:26:00.001+05:00

(July 14, 2011)
An International Seminar on Financial Inclusion for Central Asia, the Caucasus, and South Asia organized by Asian Development Bank Institute-Japan, APEC Business Advisory Council -China, & Asia-Pacific Finance and Development Center from 12th – 14th July, 11, concluded days today in Urumqi, Peoples Republic of China. Delegate from China, Japan, Pakistan, Bangladesh, India, Malaysia, Singapore, Kazakhstan, Uzbekistan, Tajikistan, Georgia, New Zeeland, Romania, Kyrgyz, UK and Afghanistan are participating in this Seminar, wherein Current State of Financial Inclusion Developing in Asia, Rural Finance in PR China, Key Regulatory Issues in Promoting Financial Inclusion, Evolution of Microfinance Institutions towards Financial Self-Sustainability through Innovation, Service Diversification and Islamic Microfinance were discussed in details.

The third day was allocated to Islamic Microfinance and Zubair Mughal – Chief Executive Officer, AlHuda Centre of Islamic Banking and Economics Pakistan gave the Key Note speech on Islamic Microfinance, said that Islam has given the best system for poverty alleviation and both Muslims and non-Muslims can benefit from it. He emphasized that the people from Central Asia, the Caucasus, and South Asia can equally get benefit from Islamic principles of Microfinance. He said the out of the total population of 1.7 billion about 562 million are Muslims in these regions, which becomes important for financial inclusion through this system. Islamic Microfinance is compatible to work with any model of Microfinance and it has the alternative to all the products of Conventional system.

Mr. Zubair Mughal further said that in the wake of the current financial crisis all around the globe, the Islamic Microfinance has gained even more importance due to its transparency and sustainability. He also discussed the poverty issues of Central Asia, the Caucasus, and South Asia separately so that Islamic Microfinance becomes an effective tool for poverty alleviation in these areas. Mr. Zubair Mughal offered his services from AlHuda-Centre of Islamic Banking and Economics who have also set up a Help Desk for Advisory, Trainings and Capacity Building for Microfinance Institutions. We provide complete solutions in Islamic Microfinance for poverty alleviation are practiced effectively.

Islamic Microfinance can eliminate the Poverty from the world

2011-06-17T12:23:00.001+05:00

AlHuda Centre of Islamic Banking and Economics (AlHuda-CIBE) jointly with Akhuwat organizing an International Conference on Islamic Microfinance on June 13, 2011 at Faisal Masque Auditorium in Islamabad.

The objective of this conference is to share the experiences and research of the seasoned scholars and practitioners of Islamic Microfinance from all over the world for ensuring poverty alleviation from the world. A variety of experiences and models in Islamic Microfinance, Shariah Principles, QArz-e-hasan, Waqf, Micro-Takaful and the use of Technology in Islamic Microfinance will be discussed and shared at the Conference.

One of the important points is to share the Qarz-e-hasan model of Akhuwat which has so far achieved the milestone of Rs. One Billion (Rs.1,000,000,000/-) lending to over 90,000 poor beneficiaries. Almost 17,000 million people live below the poverty line in the world of which 44% live in the Muslim majority countries which become the prime reason behind Islamic Microfinance. In the recent past, the international donor agencies like: USAID, CGAP, World Bank, IFC, Frankfurt Finance School etc have conducted surveys and research which became convincing that Islamic Microfinance in the genuine need in these Muslim majority countries. At the moment 300 Islamic Microfinance Institutions in 32 countries including: Indonesia, Kenya, Afghanistan, Bangladesh, Sri Lanka, Yemen, Egypt, Sudan, Tanzania, Mauritius, South Africa, Malaysia and Pakistan are working on Poverty alleviation. Due to its more productive role, Islamic Microfinance is gaining popularity in those countries where Muslims are in minorities. AlHuda-CIBE has take initiative to setup an Islamic Microfinance Network in coordination with many Islamic Microfinance institutions to bring them together at one platform.

The Organizer of the Conference Mr Zubair Mughal (CEO, AlHUda-CIBE), while declaring the objectives and targets, said “Pakistan is gaining a unique position in Islamic Microfinance, and playing a leading role in this sector, and so hosting of this conference on Islamic Microfinance will further strengthen this idea” Mr. Zubair further explained that this conference will make Islamic Microfinance globally popular and and it will work as the genuine ray of hope for the 40% Pakistanis living below the poverty line.

Other national and International institutions participating in this conference are Islamic Relief Pakistan (IRP), ASASA, CWCD, Muslim Aid, Helping Hand, Khwendo Kor, Scottish Government, Nymet Islamic Microfinance, Awqaf-South Africa, Albaraka-MPCS. Pakistan Microfinance Network (PMN) and Islamic Microfinance Network also supporting this conference.

A new chance in Egypt for Islamic finance

2011-06-17T12:10:00.001+05:00

DUBAI: Covered head-to-toe in a black abaya embroidered with red and yellow flowers, Amal Abbas waits for her turn to place a deposit at Cairo’s Al Baraka Egypt Bank, one of Egypt’s two fully-fledged Islamic banks.

Although Egypt is considered the birthplace of Islamic finance, which adheres to Islamic principles banning interest and speculative trading, its growth has lagged due to past corruption scandals, while the previous government sought to enforce a more secular financial system.

But after the Egyptian revolution toppled Hosni Mubarak and his government, Muslims like Abbas are embracing Islamic banking, raising the prospect that Egypt could become another thriving centre of Islamic finance.

“I prefer Islamic finance, it keeps me far from usury and I feel my money is blessed,” said the 50 year-old research centre manager at the Mohandessin branch of Al Baraka Egypt Bank.

“My husband has been dealing with mainstream banks for more than 30 years and all his projects failed because they were funded by unblessed money.”

According to a 2009 report by consulting firm McKinsey, Islamic banking only accounts for three to four per cent of Egypt’s $193 billion banking industry. That compares with 46 per cent in the United Arab Emirates.

“In a post-Mubarak era, the urgency of rebuilding and changing things will clash with the absence of resources and lack of money,” said Ibrahim Warde, adjunct professor at The Fletcher School of Diplomacy at Tufts University.

That will likely present an opportunity for Islamic finance houses in the Gulf region, which now serves as the industry’s global hub.

“Egypt is going to look towards the Gulf for money and it’s going to have to offer Islamic options to maximise investments.”

Cairo-based National Bank for Development, which is converting into a full-fledged Islamic bank, is already 49 per cent-owned by Abu Dhabi Islamic Bank. Al Baraka Egypt is in fact a unit of Bahrain’s Al Baraka Bank.

There’s also keen interest in Egypt for Islamic insurance, or takaful, which makes up five per cent of Egypt’s $1.45 billion insurance market but is expected to grow dramatically, according to a March report by Islamic consultancy BMB Islamic.

Salama Islamic Arab Insurance’s chief executive Saleh Malaikah said this month that demand for its products in Egypt have grown significantly since the revolution.

According to data from Bankscope and Thomson Reuters, Egypt could see Islamic finance assets grow to $10 billion in 2013 from $6 billion in 2007.

POLITICAL TOOL

Challenges remain, given the less than encouraging history of Egypt’s Islamic finance industry.

Millions of Egyptians were stung by ponzi schemes in the mid-1980s, when a number of money management companies touted Islamic investments at returns above local interest rates.

A new post-Mubarak administration is expected to show more interest in Islamic finance, despite concerns that a growing Islamic finance industry could also provide political support for Islamic opposition groups in the country of 80 million.

Egypt will need to adopt Islamic banking as one tool to appease politically active Islamic groups or face a barrage of criticism for adhering to the previous regime’s hard line against the industry, said Humayon Dar, chief executive of consultancy BMBIslamic.

“Egypt is a religiously sensitive country. There are a number of families and small savers who wouldn’t want to use the conventional system,” he said. “If there’s a movement towards interest-free banking, that would draw deposits.”

Grassroots support is already emerging among conservative Muslims. Manal al-Moursi, another bank customer at Al Baraka Egypt Bank, said Egyptians are turning to Islamic finance, in part, to show their support for the Muslim Brotherhood.

The Muslim Brotherhood, founded in 1928, was long persecuted as the main challenger to the ruling National Democratic Party in parliament and was one of the most vocal protesters during the demonstrations that toppled Mubarak on Feb. 11.

With the dissolution of the NDP and growing acceptance of the Muslim Brotherhood in mainstream politics, experts say extremists will have increasing influence in the new Egypt and Islamic finance will serve as one way to propagate Islamic values and gain supporters.

“The Muslim Brotherhood are for Islamic finance because it is related to religion,” said Mohasseb Refaat, deputy manager at Bank of Alexandria. “They will promote the idea so long as it is in their benefit.”

Refaat said the industry is likely to gain more footing in Egypt if the Brotherhood secures a significant number of seats in the 508-member parliament in September. One leading Brotherhood figure said the group could field candidates for as many as 49 per cent of the seats.

Even secularists calling for less religion in society may make a pre-emptive attempt to promote Islamic finance ahead of elections to reach a wider group of constituents.

Takaful Malaysia launches risk management product

2011-05-17T10:45:00.004+05:00

KUCHING: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) introduced its latest exclusive and innovative product, Takaful mySME which focuses on risk management solutions for the four top business sectors in Malaysia.

In a media conference held here yesterday, Takaful Malaysia chief marketing officer Alex Tan initiated a panel discussion by stating that ‘risk management’ was understood to be ‘insurance’ which in turn meant ‘protection’ for individuals and businesses alike.

As such, mySME risk management solutions were offered to small-and-medium-enterprise (SME) entrepreneurs to enjoy the best comprehensive protection plan.

He pointed out that Takaful products were open to all Malaysians provided the businesses conferred to islamic principles.

Tan also emphasised that Takaful Malaysia premiums were on average lower than conventional insurance coverage and that the takaful certificate holders who did not make any claims in the first 12 months would be entitled to a 15 per cent rebate automatically.

Also present in the panel discussion were head of EONCap Islamic Bank Bhd (EONCap Islamic) business banking-i Ruslena Ramli, Rabiah Amit managing director of Rabiah Amit Cake House, managing director of SME Factors Sdn Bhd Syed Zed Al Qudsy and panel mediator Vickneswari Gannason.

Takaful Malaysia had recently signed a Memorandum of Understanding (MoU) with SME Corp Malaysia on April 5 to bring awareness to Malaysian SMEs via roadshows themed “Powering SMEs with Takaful mySME’.

SME Corp (Sarawak) state assistant director Florence Mawar said that SMEs made up 99.2 per cent of the business sector and the four sectors being focused on were light manufacturing, retail, food and beverages as well as office and services.

Ruslena pointed out that EonCap Islamic currently offered a whole suite of banking and financial products as well as custom-tailored combinations for SMEs as outlined in the working capital enhancement scheme.

Syed Zed emphasised that assistance of local SMEs, talent retention, enhanced customer service innovation and market focus were essential in developing SMEs on a larger scale.

Rabiah, with almost 30 years experience as a SME operator, started the business at home and faced many challenges over the years, including a fire which destroyed the business premises and a vehicle.

As such, she concluded by stating that protecting the business was absolutely essential. This concurred with Tan’s earlier statement that insurance was about protecting the business and self.

Islamic Microfinance only Solution to Worldwide Poverty Alleviation - International Microfinance Experts gathering on June 13 in Islamabad

2011-04-26T20:11:00.002+05:00

Poverty Alleviation has become a world phenomenon which has led to invent various methods to mitigate it. Mutual funding model, sometimes scholarly views of Dr. Yunus and technology/mobile banking are adopted to cut it down. Therefore latest research has proved that Islamic microfinance has all the substitutions to cut down the worldwide poverty. The subject matter is focused upon in “International Conference on Islamic Microfinance” that’s going to be the largest event in the history of Islamic microfinance - is planned on June 13, 2011 in Islamabad. Varied models of Islamic microfinance, Shariah issues, Zuqat, Dard-e-Husna and Waqf model to decrease poverty, usage of technology and the implementation of Islamic microfinance in flood hit areas will be the hot topics to discuss in this mega event.

It is to be noted that almost One Billion Seventy Crore (1.7 billion) people are hand to mouth and living lives below the poverty line. Amongst them 44% are residing in Muslim countries and this factor highlights the need of Islamic microfinance in an effective way. Recent surveys and research reports of USAID, CGAP, World Bank, IFC and Frankford Finance School report Islamic microfinance the best substitution for the poverty alleviation. Currently more than 300 Islamic microfinance organizations in Indonesia, Kenya, Afghanistan, Bangladesh, Sri Lanka, Yemen, Egypt, Sudan, Tanzania, Mauritius, South Africa, Malaysia and Pakistan are working to alleviate the poverty. It is a pleasing aspect that this number is rapidly increasing not only in Muslim countries but also in non Muslim countries. To unite all these organizations in one platform, an “Islamic Microfinance Network” has also been formed. The important aspect of this conference is that microfinance model of “Akhuwat Microfinance Pakistan” will be presented as a model which has released more than one Billion PKR funds to the poors.

While discussing the importance of the conference, Mr. Zubair Mughal, Chief Executive officer, AlHuda Centre of Islamic Banking and Economics Pakistan, the organizer of the conference said that Pakistan has a prominent place in the field of Islamic microfinance sector and Pakistan is representing Islamic microfinance as a leader of the industry and to organize this conference also manifests the same cause. He further added that this event will further promote this sector in the world. He said that there will be a separate session for the contribution of Islamic microfinance for the relief work in flood hit areas#
Reference: http://www.alhudacibe.com/IMFC-2011/

Growth expected for Malaysian Insurance Sector

2011-03-18T16:29:00.002+05:00

Projections foresee growth in 2011 topping 12% across the Malaysian insurance industry. The Malaysian government has unveiled stimulus plans and other legislative initiatives which together with an historically low interest rate environment have lead to very favorable conditions for growth in the insurance sector. All forecasts however need to be tempered by an awareness of uncertainties about the outlook for a number of western economies and the possible resulting downward pressures on overall performance of the global insurance industry.

Malaysia’s economy grew 7.2 percent last year, the highest rate experienced since the year 2000. The Malaysian government has aggressively pursued substantial investment programs with the explicit goals of doubling GDP per-capita and turning Malaysia into a high income country by 2020. New parliamentary initiatives such as the New Economic Model (NEM), Economic Transformation Program (ETP) and the Tenth Malaysian Plan will, according to industry analysts, lead to a growth in demand for insurance products and services.

The Life Insurance Association of Malaysia (LIAM) held that in addition to these numerous initiatives announced in the Economic Transformation Program, including the private pension plan and worker insurance scheme, economic conditions in the country are ripe for further life insurance development. Consumer confidence in Malaysia has shown marked improvement, rising to 107 points on the latest Nielsen Global Consumer Confidence Index, its highest score since the third quarter of 2006. Around 41 percent of the Malaysian population is currently insured, according to the LIAM. This level of life-insurance penetration is low by a developed economy’s standards and will be an important factor in the further growth of the sector. The current low interest rate environment will act as an impetus to consumers seeking high-yielding products like insurance in Malaysia.

The LIAM reported that new business sales for life insurance rose 19 percent on a weighted premium basis during the first three quarters of 2010. This growth was accredited to strong performances in regular premium sales which were up 21 percent compared with the identical period in 2009. Single premium business, however, registered a small 1 point decline.

The LIAM’s views were supported by the General Insurance Association of Malaysia (PIAM), the Malaysian Takaful Association (MTA) and Allianz Malaysia Bhd (AMB).

The General Insurance Association of Malaysia (PIAM) executive director Mr. Lim Chia Fook reported that, in absence of any further adverse impacts on the world economy, the insurance association foresees the outlook for the general insurance industry this year to be very positive with an increased demand for insurance in all areas expected. The general insurance industry recorded that for the third quarter of 2010, gross direct premium estimates were 3.16B$, demonstrating a growth of nine percent over the same three quarter period during the previous year.

The Malaysian medical and health insurance sector (MHI) is likewise expected to sustain powerful development, driven by upward trends in consumer awareness coupled with an increasing want for cover against escalating healthcare costs. Mr. Lim added that the introduction of the health insurance plan designated for foreign workers would further drive growth in the MHI sector. PIAM anticipated new areas of industry growth through micro-insurance products, especially considering the rapidly developing small and medium enterprise and biotechnology sector in Malaysia.

The Malaysian Takaful Association (MTA) expects the Islamic insurance industry to continue to improve on its 10% market penetration, particularly by expanding into rural areas. The Islamic insurance market has grown due to more interest in shariah-compliant investments. The industry has experienced substantial growth after the Malaysian central bank issued takaful licenses to four established consortiums in 2006, which included HSBC, Malaysia’s Hong Leong Bank and Prudential Holdings. Malaysia currently has eight takaful operators and trusts that the inclusion of new insurance players would increase industry competition, pushing players not only to capture new market share but also to develop fresh takaful products. Similar to general insurers, the islamic insurance sector operates through correlation with macro economic performance; hence the positive outlook for the Malaysian domestic economy will affect the development of both sectors.

MTA chairman Datuk Syed Moheeb Syed Kamarulzaman reported: “The significant growth in retail credit financing, especially in relation to home financing in 2010, may be curbed to some extent in 2011 and this should encourage takaful operators to diversify their business focus away from financing protection products to agency driven products.”

Allianz Malaysia CEO Jens Reisch remarked that apart from the initial low insurance penetration rate in the country, increase in consumer knowledge, greater demand for retirement savings, together with growing Bancassurance and takaful businesses from a more liberalized insurance industry, are some of the other factors that would advance the insurance sector. Mr. Reisch added that Allianz: “is undertaking numerous initiatives to improve its distribution capabilities and we hope to continue to strengthen the top line and sustain profitability.”

Mr. Reisch highlighted that the major challenges facing the insurance trade would be the provision of long-term assets for packaging insurance products, the low interest environment for insurers failing to manifest attractive guaranteed return products and the requirement to offer high guaranteed products into the long term future.

The LIAM assert that global economic uncertainty could restrain the growth potential of the industry: “While it is an external factor, the quagmire prevailing in the established economies of the United States, Japan, Europe and the reaction of the local share market towards such sentiments may have an indirect impact on the industry. It can cause a slowdown on external demand that will eventually influence consumers in terms of decision-making, thus making sales more difficult.”

The association’s president, Md Adnan Md Zain, believes the best actions to take to overcome these peripheral obstacles would be through prudent domestic policies, active oversight, working closely with regulators and better integrating as an industry. The Life Insurance Association doesn’t discount the potential for inclusion of new foreign insurance players that could invigorate the market as well as the continued implementation of the financial inclusiveness programs undertaken by both the authorities and financial institutions.

Courtesy by: International News

Amana Takaful announces rights issue

2011-03-15T15:59:00.003+05:00

Amana Takaful, the pioneer of Takaful in Sri Lanka, has announced a rights issues on a 1:1 basis at Rs 1.50 a share, which is subject to approval by the Company’s Shareholders at the EGM scheduled for 18th March 2011. Once concluded, the rights issue will see Amana Takaful’s core capital rise to Rs 1.25bn, which will facilitate its expansion strategy in spearheading Takaful in Sri Lanka as well as consolidating its position to meet changes in regulations pertaining to risk-based capital and splitting of life and general business, the company said in a statement.

"We feel bullish about the opportunities that are emerging through the post war development taking place, backed by long term economic policies of the Government. The changes in regulation pertaining to the insurance industry is also a strong impetus and the recent amendments to the Regulation of the Insurance Industry Act (RII act) will allow us to spread Takaful more strongly in Sri Lanka," said Ehsan Zaheed, Director/CEO, Amana Takaful PLC.

"These changes also allow us to spread our investments portfolio, which has up to now been limited. Further, the budget proposals are also an added source of strength to us, which will help us increase financial performance," he added.

"The economic climate for investment is good in Sri Lanka as the regulator intends to adhere to a development oriented monetary policy. This will bring liquidity back into the market for investment and other activity thereby creating more opportunities for insurance companies to capitalise on. As Sri Lanka’s only Takaful provider we are readying ourselves to meet this very challenge," Zaheed said.

In a related development, Amana Investments, the parent company of Amana Takaful, was awarded a license to operate a fully fledged commercial bank. Called Amana Bank it will be Sri Lanka’s first fully fledged Islamic Bank and herald a new era in Islamic banking and finance in Sri Lanka helping grow with the momentum built by Amana Investments over the last decade of operations.

Amana Takaful Maldives also made news recently when it applied to be listed in the Maldivian Stock Exchange making it the first and only insurance company to do so in the country. Amana Takaful Maldives, a subsidiary of Amana Takaful PLC, has served the people of Maldives since 2003 and is a leading insurer patronised by the people, the government and private institutions alike.

Globally Takaful is growing fast and estimated to reach a staggering 7.4 billion by the year 2015 according to Moody’s Investors Service of the US, from 5.3 billion as at 2008 as mentioned in the Ernst & Young World Takaful Report of 2010. World over there are about 80 Takaful operators with an additional 200 Takaful windows. Furthermore, according to Bank Negara of Malaysia the global Takaful growth rate stands at 20 percent.

Courtesy By:The Island

Indonesia Islamic Insurance Assets Increased 47.6% in 2010

2011-03-15T13:20:00.002+05:00

Indonesia Islamic Insurance Assets Increased 47.6% in 2010
By Suryani Omar - Mar 15, 2011 10:09 AM GMT+0500
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Business ExchangeBuzz up!DiggPrint Email .Indonesia’s Islamic insurance assets surged 47.6 percent to 4.5 trillion rupiah ($512 million) last year from a year earlier, Indonesia’s Capital Market and Financial Institution Supervisory Agency said.

Islamic insurance, or takaful, is based on the Koranic principle of mutual assistance where policy holders contribute a sum of money to a common pool managed by the company.

Premiums for the takaful sector rose 35.7 percent to 3.2 trillion rupiah in 2010 from a year earlier, Isa Rachmatarwata, head of the insurance bureau at the agency, said in a written response to questions.

Islamic insurance made up 2 percent of the total 224.9 trillion of insurance assets in the country, Rachmatarwata said.

Courtesy by: Bloomberg

Labuan licensed firms can have dual locations

2011-03-10T10:24:00.002+05:00

Labuan International Business and Financial Centre (Labuan IBFC) licensed insurance and takaful firms can now locate their management and operational offices in Kuala Lumpur, or any other city within Malaysia, in line with the ongoing process of co-location and the movement towards a fully abstract international business and financial centre.

This allowance is part of the financial sector liberalisation package initially introduced by Labuan Financial Services Authority in 2009, which provides for similar concessions to Labuan Holding Companies, Labuan Banks and Investment Banks.

The extension to Labuan insurance and takaful entities underlined the important role insurance and takaful played in the growth and success of Labuan IBFC, said Labuan FSA director-general Datuk Azizan Abdul Rahman.

“The insurance and takaful sector has consistently recorded strong performance and remains as one of the core sectors in Labuan IBFC, with gross premiums written exceeding US$1bil and double-digit increase in the number of licences,” he said.

counrtesy by: The star Online

Takaful Emarat appoints Action UAE as its regional public relations partner

2011-03-09T13:15:00.003+05:00

.UAE-headquartered Takaful Emarat, a Shariah compliant life and health insurance company, announced the appointment of Action Global Communications (Action UAE), the region's largest independent public relations consultancy, as its public relations partner across the GCC region.

Action's appointment comes as part of Takaful Emarat's strategic objective to ramp up its marketing and communication activities this year in line with its ongoing drive to strengthen its presence within the UAE and across the region.

Present at the signing ceremony to formalise Action's appointment were Takaful Emarat's Chairman Dr. Khalid Saqer Bukhammas Al-Marri; Board Member, Mohamed Ali Abdalla Ali Alsari; Consultant to the Board Nader Qaddumi and General Manager, Ghassan Marrouche.

Tony Christodoulou, Chairman, Action Global Communications and General Manager, Action UAE David Baker, attended the signing ceremony from Action UAE.

Takaful Emarat was founded through a strategic partnership between Al -Buhaira National Insurance Co the UAE's leading insurance company and UNIQA Group Austria, one of Central Europe's most trusted insurance brand.

Courtesy By: AME Info

Takaful Coverage Introduced For Students

2011-03-05T13:52:00.003+05:00

Bandar Seri Begawan - For as little as $5 per year, a student can get Islamic insurance coverage amounting to $5,000 in the Group Personal Accident Takaful for students introduced by Takaful Brunei Am/General.

To explain the importance of having Takaful (Islamic insurance) coverage for students, Takaful Brunei Am Sdn Bhd (TBA) and Takaful Brunei Keluarga Sdn Bhd (TBK) yesterday held a presentation for teachers, parents and students of Sayyidina Hassan Secondary School.

The presentation revealed that Takaful Brunei Am Sdn Bhd (TBA)'s personal accident coverage for children offered comprehensive protection in the event of death and permanent total disablement due to accident or illness. The takaful insurance offers 24-hour coverage worldwide and medical expenses. The talks also highlighted saving

and protection products for future financial planning. The Group Personal Accident Takaful for students is divided into three plans, namely, Plan A for $5,000 coverage, Plan B for $10,000 coverage and Plan C for $15,000 coverage. In case of death, beneficiary will get $500 while medical expenses is covered at $1,000 for all plans.

Some 325 students from uniformed groups, namely, army cadets, police cadets, scouts, fire and rescue cadets, Red Crescent, Girl Guides, and their parents attended the talk. Also in attendance were the principal of the school Dayang Hajah Suriani binti Hj Noorhashim and Pg Hj Md Sufffi bin Pg Hashim, General Manager of TBA.

In another briefing recently, Takaful Brunei Am Sdn Bhd and Takaful Brunei Keluarga Sdn Bhd conducted a talk at Suri Seri Begawan Hospital, KB. The talk highlighted various products (Life and non-Life products) Takaful Brunei offers to suit an individual.

Courtesy by: Borneo Bulletin

FWU Group receive 'Best Takaful Provider' Award at Euromoney Islamic Finance Awards 2011

2011-02-24T13:16:00.004+05:00

Thursday 24th February 2011, Dubai, UAE - FWU Group today announced that it was the recipient of the "Best Takaful Provider" Award from the Euromoney Islamic Finance Awards 2011 in London held on the 22nd February 2011. The event, hosted at the prestigious Landmark Hotel, recognised the most successful Islamic institutions worldwide.

It is the second time that FWU Group receive an accolade from the Euromoney Islamic Finance Awards. In 2007 FWU Group was awarded as the "Best Life Takaful Provider". This award recognised the group's growing footprint, reputation for innovation, creative product design, IT systems and quality of white labelled unit-linked savings plans. FWU Group has replicated this successful model to its international Family Takaful business, bringing in the knowledge and expertise. Indeed, FWU Group is the uncontested leader in the fast expanding Takaful industry, and is the largest global producer of Bancatakaful in five markets: Saudi Arabia, UAE, Kuwait, Malaysia and Pakistan.

"Our position as leaders can be attributed to the successful long term strategic partnerships we have developed with local Takaful partners and the distribution agreements with major banks in each market. FWU Group has developed a very unique business model" says Dr Manfred Dirrheimer, Chairman and CEO.

FWU Group offers its bank distribution partners a customised innovative Takaful product family, which includes savings, education, and marriage plans. FWU Group also introduced in 2010 a second generation of Family Takaful Investment Linked Plans (both Regular and Single Premium). The investment value proposition takes into account the various risk profiles specific to each customer segment and provides an open-investment architecture where banks can incorporate their own Shari'ah-compliant funds into the investments universe as well as a proprietary quantitative investment model for the monthly fund selection and allocation. FWU Group's Takaful partners offer two distinct investment strategies: equities and cash. The Participant in the Takaful Fund is able to choose which strategy is best suited to his/her risk appetite.

FWU Group has recently introduced a unique investment programme in conjunction with an international bank: the dynamic principal-protected equity strategy. This Dynamic Protection Plan (DPP) is an additional tool, which will be added to the actively managed underlying equity portfolio of the FWU Group Family Takaful Programmes. It has been designed to allow for participation in the upward trends of the equity markets whilst offering protection against bearish markets.

Thanks to this mechanism, the level of protected unit price can only increase, but never decrease during the entire contribution payment period of the Takaful contract. The concept offers not only capital protection for the total invested contribution component at the end of the contribution payment period, but also a continuous and innovative fixing of protected unit prices at maturity within the Family Takaful Program. As a result, the Participant can profit continuously from the opportunities of the international stock markets while being protected against losses by the end of the investment term.

Besides product and process innovation, FWU Group also prides itself in giving advice and support regarding regulatory matters, full after-sales service including training and customer risk profiling.

"FWU Group has ambitious plans for the Takaful industry and is planning to further extend its outreach to countries such as Turkey, Egypt, Indonesia, Morocco, Brunei and South Africa. FWU Group's aim is to create a Family Takaful business not only for Muslim communities but also for the worldwide non-Muslim consumers" says Sohail Jaffer, Partner and Head of International Business Development.

Courtesy by: Zawya

Dow Jones Indexes to launch Takaful Index

2011-02-23T12:13:00.002+05:00

Dow Jones Indexes is expanding its Dow Jones Islamic Market Indexes series by launching the Dow Jones Islamic Market Global Finance & Takaful Index, which measures the performance of financial services stocks that pass rules-based screens for Shari’ah compliance.
The new index, designed to provide broader coverage of the Shari’ah-compliant financial services sector, will serve as a benchmark and an underlying instrument for investment products such as mutual funds and exchange-traded funds (ETFs).

“The Dow Jones Islamic Market Indexes is a unique series that combines faith-based principles and benchmarking,” said Michael A. Petronella, president, Dow Jones Indexes. “Our index family was the first to market and has clearly set the standards of Islamic indexing around the world. And, once again, with the launch of the Dow Jones Islamic Market Global Finance & Takaful Index, we are providing the market with the first benchmark of its kind for these combined sectors.”

Eligible companies are banks, insurance and financial services companies. Included in the index are those stocks that pass financial ratio screens that are less than 33 per cent in total debt, divided by trailing 24-month average market capitalisation; cash plus interest-bearing securities, divided by trailing 24-month average market capitalisation; and accounts receivables, divided by trailing 24-month average market capitalisation.

The dollar-denominated Dow Jones Islamic Market Global Finance & Takaful Index is weighted based on float-adjusted market capitalization, with the weight of individual stocks restricted to 15 per cent. The index composition is reviewed quarterly in March, June, September and December; it is also regularly reviewed to account for corporate actions such as mergers, de-listings or bankruptcies.

Courtesy by: CPI Financial

Amana Takaful and John Keells to defend titles

2011-02-19T10:11:00.003+05:00

Amana Takaful ‘A’ will defend the ‘Cup’ championship and John Keells Group the ‘Plate’ when the 35th Seven-A-Side Football tournament conducted by the Mercantile Football Association (MFA) is worked off on Sunday, February 27 at Reid Avenue, Colombo 7.

This year, the ‘Cup’ champions will receive prize money of

Rs. 25,000/- and the runners-up Rs. 15,000/-The ‘Plate’ champions will receive a cash award of Rs. 15,000/- while the runners-up will be richer by Rs. 10,000/-. Furthemore, the winners and runners-up will receive plaques, while the best goal keepers and best players of each category will also receive cash awards of Rs. 2000/- each.

This year, 32 teams have entered the tournament.

Group ‘A’ – Hirdramani ‘A’, HSBC ‘B’, Tri Star Apparel and Seylan Bank. ‘B’ Dialog ‘A’, Galadari Hotel, Expo Lanka ‘B and Sampath Bank. ‘C’ Eskimo Fashion, MAS Holdings ‘Blue’, Aiport and Aviation and Colombo Dockyard. ‘D’ HNB ‘A’ NDB Bank, Lake House and Traveller Global. ‘E’ Ceylinco Insurance, HNB ‘B’, MAS Holdings ‘Red’ and Hirdramani ‘B.’ ‘F’ HSBC ‘A’, Soft Logic, CIFL and Amana Takaful. ‘G’ Hayleys, L.B. Finance, Commercial Bank and John Keells Group. ‘H’ Dialog ‘B’, Sri Lanka Catering, Expo Lanka ‘A’ and Mobitel.

Courtesy by: Bruce Maurice

Niger insurance urges public to buy Takaful insurance products

2011-02-17T15:10:00.001+05:00

The management of Niger Insurance plc has enjoined members of the insuring public to buy Takaful insurance products as part of efforts to imbibe savings culture.

The company’s Managing Director, Clinton Uranta, made this call during a chat with correspondents in Lagos.

Unlike the conventional insurance which majority of the Shariah scholars believe is unlawful due to involvement of Riba (interest), Maisir (gambling) and Gharar (uncertainty), Takaful, the Islamic alternative to insurance, is based on the concept of social solidarity, cooperation and mutual indemnification of losses of members.

It is a pact among a group of persons who agree to jointly indemnify the loss or damage that may be inflicted upon any of them, out of the fund they donate collectively. The Takaful contract so agreed usually involves the concepts of Mudarabah, Tabarru´ (to donate for benefit of others) and mutual sharing of losses with the overall objective of eliminating the element of uncertainty.

Uranta said the people should not see the takaful products as religious products especially as the bottom line is savings, which can either be savings for school fees, pilgrimage, house rent or any other thing.

While pointing out that takaful is not new to insurance industry globally as it is also being offered by many insurance companies globally, he said the product has been doing very well since it was introduced by Niger Insurance.

A large number of Takaful companies exist in the Middle East, Far East, Iran, Turkey, and Sudan and even in some non-Islamic countries. There are over 60 companies offering Takaful services in 23 countries around the world.

“In our own unique way, we have expanded the product in such a way that even non Muslims embrace it. But the bottom line is savings. Savings for school fees pilgrimage, house rent and what have you. That was how we modified it to suit our people in Nigeria. So you asked me whether it is doing well, it is doing well and we will continue to bring innovation into it to make it more attractive to the insuring public,” he stated.

Uranta also spoke on the branch expansion and restructuring programmes embarked upon by the company, saying the firm now has two additional regional offices in Sokoto and Yola to increase its total outlets to 45, while efforts are ongoing to open more new branches in the nearest future.

He also hinted that the insurance outfit has set a premium income target of N 12 billion for itself in 2011 based on the fact that the economy is on the recovery path, coupled with the fact that the company recently made new appointments and embarked on internal restructuring.

Niger Insurance Plc is a public quoted composite insurance company. The management team of the company is made up of trained, experienced and competent professionals with extensive management and technical skill.

Niger Insurance is fully computerised with the most advanced software technology. The computer network is capable of expansion and upgrading to meet with present and future increases in the volume of business.

The company has also put in place sound reinsurance treaties with local and foreign first class reinsurance companies led by Swiss Re. These comprehensive securities ensure financial stability and exude confidence in its service to both present and prospective customers.

Courtesy by; Vanguard

Islamic insurance firm sees opportunity after Egypt crisis

2011-02-15T10:12:00.002+05:00

DUBAI: Tokio Marine Middle East, an Islamic insurance services provider, sees an opportunity to expand its business in Egypt following the recent political turmoil, the company’s chief executive told Reuters.

Islamic insurance, or takaful, is already seeing demand in Egypt and the recent demonstrations will highlight the need for financial protection, said Ajmal Bhatty, president and chief executive of Tokio Marine Middle East, a unit of Tokio Marine Holdings.

“The awareness for insurance, especially personal insurance is generally low in regional markets including Egypt,” Bhatty said in an interview last week.

“Events such as the recent ones generally result in increasing the awareness in people that they need to do more about protection of their livelihood and assets.”

The unprecedented demonstrations captivated the world and led to the ouster of President Hosni Mubarak after a 30-year reign.

Tokio Marine launched two takaful companies in Egypt in January 2010. There are eight Islamic insurance providers in the country.

Bhatty said the industry expects to pay claims resulting from the turmoil.

The Japanese insurer said last year that it expected the two sharia-compliant units to generate about $3.5 million in annual premium income in the first financial year, which closes in June. That figure should increase to $136.4 million within 10 years, giving the Egyptian operations more than a one-fifth share of the takaful market in the country.

Islamic insurance, or takaful, is similar to mutual insurance but with a clear segregation of the assets owned by policy holders and those owned by the insurer.

The industry is expected to be a clear growth driver within the nearly $1 trillion Islamic finance industry over the next five years.

Tokio Marine is also considering launching micro-takaful operations in Egypt to complement microfinance programs already available.

Micro-takaful is an Islamic insurance scheme for people on low incomes who cannot afford insurance premiums. As part of a micro-credit scheme, a small amount goes to cover areas such as life, disability and accident insurance, as well as livestock cover or crop insurance against hazards of severe weather or flooding.

Bhatty said the company has already successfully provided conventional micro-insurance in India through a joint venture with a Japanese fertilizer company.

“We would like to explore microtakaful possibilities for Egypt as a good proportion of the society would benefit from it,” Bhatty said.

Courtesy by: Reuters

Takaful: The Cinderella of the Islamic finance industry

2011-02-14T12:17:00.003+05:00

Takaful (Islamic mutual insurance), the Cinderella of the Islamic finance industry, received potentially a major boost with the entry at the end of January 2011 of US insurance giant AIG (American Insurance Group) into the Malaysian market through a RM100-million joint venture, AIA AFG Takaful Berhad, between its flagship Asian entity, American International Assurance Berhad (70 percent equity) and Alliance Bank Malaysia Berhad (30 percent equity), a member of the Alliance Financial Group Berhad of Malaysia.

In fact, two further international-local Takaful joint ventures are scheduled to come to enter the market in 2011 following the approval last year by Malaysian Finance Minister and Prime Minister Mohd Najib Abdul Razak of the four new joint-venture family Takaful licenses under the Takaful Act of 1984. This was part of Malaysia’s ongoing financial liberalization of its Islamic finance sector which was announced by Prime Minister Najib in April 2009.

These included AIA AFG Takaful Berhad; the joint venture between AMMB Holdings Berhad (70 percent) and Friends Provident Group PLC, UK (30 percent); one between ING Management Holdings (Malaysia) Sdn Bhd (60 percent), Public Bank Berhad (20 percent) and Public Islamic Bank Berhad (20 percent); and one between The Great Eastern Life Assurance Company Ltd. (70 percent) and Koperasi Angkatan Tentera Malaysia Berhad (30 percent).

This brings the number of Takaful operators in Malaysia to 12. The other Takaful operators include CIMB Aviva Takaful Berhad, Etiqa Takaful Berhad, Hong Leong Tokio Marine Takaful Berhad, HSBC Amanah Takaful (Malaysia) Sdn Bhd, MAA Takaful Berhad, Prudential BSN Takaful Berhad, Syarikat Takaful Malaysia Berhad and Takaful Ikhlas Sdn. Bhd. Further international interest in Malaysia’s Takaful market is the 35 percent equity stake being finalized by Japan’s Mitsui Sumitomo in Hong Leong Tokio Marine Takaful Berhad.

In addition, Malaysia also has four Retakaful Operators, namely, ACR Retakaful SEA Berhad, MNRB Retakaful Berhad, Munchener Ruckversicherungs-Gesellschaft (Munich Re Retakaful) and Swiss Reinsurance Company Ltd. (Swiss Re Retakaful); and one International Takaful Operator in AIA Takaful International Bhd. In addition, there is also strong presence of the Takaful industry in the Labuan International Business and Financial Centre, where there are 14 Retakaful operators incorporated.

“The launching of AIA AFG Takaful Bhd. is another important milestone in our strategy toward developing a progressive Takaful industry that is resilient and is better able to meet the increasingly challenging and competitive business environment,” explained Mohd Razif bin Abd Kadir, deputy governor of Bank Negara Malaysia, the central bank and Takaful regulator, at the launch of the company in Kuala Lumpur.

However milestones in the Takaful sector should to be put in perspective. Ernst & Young estimates Global Takaful contributions at a mere $5.3 billion in 2008, even though the year-on-year growth was 28 percent. However, the base relatively to the global insurance market is extremely low as such any increase looks impressive. The growth by end 2010 was projected to reach a mere $9 billion.

Bank Negara Malaysia estimates that the Takaful industry is expected to grow by up to 20 percent annually (compared to up to 40 percent for the Islamic banking industry) and is estimated to reach $14.4 billion by end 2010.

Malaysia has the single largest Takaful market in the world with an estimated 26 percent of global Takaful assets which according to Bank Negara Malaysia totaled RM12,445.4 million — and not the second largest as one FT publication maintains because for some curious reason it includes the Iranian insurance market which is not Shariah-compliant per se. Iranian insurance companies confirm that the insurance market in Iran is not Shariah-compliant per se. The same applies to the Iranian banking sector.

Bank Negara Malaysia’s Quarterly Bulletin for Q3 2010 stressed that the insurance and Takaful sector remained resilient, supported by strong capitalization and improved profitability with a capital adequacy ratio of 222.7 percent with excess capital of RM19.2 billion. What a pity the data for the insurance and Takaful sectors are co-mingled making it impossible to analyze which of the two was better performing on a quarterly basis.

Takaful Fund Assets, according to Bank Negara Malaysia, comprised only 8 percent of the total assets of the Malaysian insurance and Takaful industry in 2009 — up from 5.7 percent in 2005 and 7.5 percent in 2008.

Total Takaful Funds, however, have more than doubled in this same period from RM5,878.4 million in 2005 to RM10,569.4 in 2008 and RM12,445.4 million in 2009. Similarly, Takaful net contributions income increased from RM1,333.7 million in 2005 to RM3,025.1 million in 2008 to RM3,521.8 million in 2009.

Where Razif is spot on is the growing diversity of the sector-product offerings by Takaful operators have further broadened to cater to the differentiated needs of customers, with family Takaful products (equivalent to life insurance) now dominating the market with a share of 78 percent of net contribution, as compared to general Takaful products (equivalent to general insurance such as fire, car etc) that dominated a share of 63 percent back in 1984.

"Similarly, the Takaful industry,” explained Razif, “exhibits high potential, as demonstrated by its robust expansion with annual growth rate of total assets and contributions averaging between 20 percent and 26 percent over the period of 2004 to 2009.”

Robust expansion may be a slight exaggeration, but Bank Negara Malaysia is rightly confident of the “strong growth prospect for the Takaful sector, in view of the large untapped potential, where out of the 53.5 percent market penetration rate for both Takaful and insurance, the market penetration rate for Takaful was merely 10.9 percent in September 2010.” The untapped areas of business within the family Takaful industry, accounting for 50.3 percent of contributions in September 2010, says the central bank, are micro-Takaful, medical and retirement products.

The Malaysian government can help leverage this growth potential by giving the Takaful sector the same policy and structural support which it has given the banking and capital markets (Sukuk) sectors over the last three decades. This support could take the form of various initiatives including increasing the provision of Shariah-compliant retirement and pension products of both government employees (those who opt for such a scheme) and individuals in general; and the greater use of Takaful products by government-linked companies (GLCs) and the two sovereign wealth funds, Khazanah Nasional and 1 Malaysia Development Berhad (1MDB) in their business.

Malaysia has the most advanced Takaful industry regulatory and legal infrastructure in the world, the same as for its Islamic banking and capital markets architecture. Given its role in providing risk protection, the Takaful industry offers a suite of financial products and services that complement the existing range available for consumers. In recognizing its importance, stressed Deputy Governor Mohd Razif, “focus has been given in developing a dynamic and vibrant Takaful industry within our Islamic financial system. Where the industry is today has been an outcome of an accumulation of efforts in instituting a comprehensive Islamic financial landscape in Malaysia's financial system. A strong institutional infrastructure and effective legal, regulatory and Shariah governance framework are the underpinnings of our Islamic financial industry. In our pursuit to develop Islamic finance, the recent enhancement to the Central Banking Act has accorded formal recognition to the existence of Islamic finance as an arm of the dual financial system, thereby giving significance and due prominence to Islamic finance.”

Moving forward, the new Shariah Governance Framework, which became effective on Jan. 1, aims at enhancing “the role of the board, the Shariah Committee and the management in relation to Shariah matters, including enhancing the relevant key organs having the responsibility to execute the Shariah compliance and research functions aimed at the attainment of a Shariah-based operating environment” of Malaysian Islamic financial institutions including Takaful and Retakaful operators.

Bank Negara Malaysia recently also issued Guidelines on Takaful Operational Framework, which establishes principles governing the operational processes of Takaful business to ensure that business activities and innovations are within the Takaful operator's risk management capacity. “With effective discharge of Takaful operators' duties, the interests of Takaful stakeholders will be safeguarded as the guidelines place emphasis on sound management to ensure sustainability of Takaful operators,” added Razif.

AIA AFG Takaful Bhd., which has a paid-up capital of RM100 million, will concentrate on bancatakaful to further enhance the development of the family Takaful industry in Malaysia, including micro-Takaful, medical and retirement products

Courtesy by: Arab News

Amana Takaful awarded ISO system certification

2011-02-12T12:40:00.001+05:00

Amana Takaful was recently awarded the ISO 9001:2008 certification for both its General and Life Takaful businesses as part of its endeavour to continuously provide higher service standards to its discerning customers. ISO 9001:2008 is a system certification that the company intends will improve its Quality Management through continual improvement.

Mr. Zaid Aboobucker, General Manager Operations and Medical Takaful of Amana Takaful PLC highlighted the importance of being ISO certified adding that it was a team effort that made it possible which will also the secret of its continuation. "We embarked on obtaining the ISO certification as part of our continuing efforts to improve our service delivery. It is our belief that this will provide us a good platform through which we can develop better service standards for the future," he said.

ISO 9001:2008 certification is awarded to companies that meet with the highest Quality Management Standards stipulated by the International Standards Organisation. The Accreditation Auditors, Det Norske Veritas (DNV, Netherlands), assessed Amana Takaful's overall operations covering General Takaful, Medical Takaful and Life Takaful. A customer centric approach was the key focus for assessing quality management to ensure that service is provided to the best of standards in terms of customer satisfaction and speedy service.

The ISO standards are based on 8 Quality Management Principles, which are aligned with the philosophy and objectives of most quality award programmes. These principles are customer focus, leadership, involvement of people, a process approach, a systems approach to management, continual improvement, a factual approach to decision making, and mutually beneficial supplier relationships.

Amana Takaful PLC is the Sri Lankan pioneer and flag bearer of the Takaful way of insurance that redefines how insurance is carried out. Takaful is a refreshingly new concept of risk management that is based on mutual and collective efforts of customers to safeguard their individual and combined risks that makes them owners of the fund and the underwriting profit that is made. Amana Takaful PLC has been operating for over a decade in Sri Lanka and has a fully-fledged operation in the Maldives since 2003.

Courtesy by: Daily Mirror

Takaful Insurans Islam Taib Benefits Presented To Fire & Rescue Dept Personnel

2011-02-11T10:27:00.002+05:00

Bandar Seri Begawan - The Acting Minister of Home Affairs, Pehin Datu Lailaraja Major General (Rtd) Dato Paduka Seri Awang Haji Halbi bin Haji Mohd Yusof, yesterday witnessed the presentation of Takaful Insurans Islam Tail) benefits for the Fire and Rescue Department's personnel. It was held at the surau of the Ministry of Home Affairs, according to a press release.
The ceremony also saw the presentation of a Takaful benefit facility for deaths and death compensation benefits for the beneficiary of a Fire and Rescue Department personnel who passed away on January 19 this year.

It was presented by Dato Paduka Sa Bali Abas, Permanent Secretary at the Ministry of Home Affairs, and Hj Osman Hj Md Jair, the Managing Director of Insurans Islam TAIB Sdn Bhd.

The Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, through the Ministry of Home. Affairs and the Fire and Rescue Department,
has a big responsibility to provide safety, security and harmony for all employees. In relation to this, all officers and personnel from the Fire and Rescue Department have been provided with a life insurance coverage package since October 1, 2009, funded by the government.

The coverage called "PelanTakaful Berkelompok" will help protect interests and lessen the burden on financial difficulties should the unexpected happen to an insured employee.

It also serves as a show of appreciation for the sincere, excellent and professional services provided to the country, taking into account the sacrifices made to perform duties given such high-risk job and tasks for the sake of the people.

Yesterday's programme began with a tahlil and Surah Yassi in recitation by Ustaz Hj Adanan Hj Ahmad, the Fire and Rescue Department's Head of Religious Teachers.

It was also attended by the Acting Permanent Secretary and Deputy Permanent Secretary at the Ministry of Home Affairs. Also present were other senior officers and staff members from the ministry, Fire and Rescue Department, as well as the National Disaster Management Centre.

Courtesy by: Borneo Bulletin

AIG, Mitsui expand in Malaysia

2011-02-10T10:07:00.002+05:00

Malaysia is attracting global companies such as American International Group Inc and Mitsui Sumitomo Insurance Co seeking to tap growth in the country’s US$4 billion Islamic insurance market.

Mitsui Sumitomo said on Jan. 28 it’s in talks to buy a stake in a local operator offering takaful, or Shariah-compliant insurance. New York-based American International formed a joint venture with Alliance Bank Malaysia Bhd in January, four months after winning a licence from the central bank.

The entrance of more insurance firms will increase the pool of funds looking for longer-maturity debt in Malaysia as the government embarks on a 10-year, US$444 billion development program. Malaysia is giving tax incentives to foreign companies setting up takaful businesses and has eased ownership rules in domestic institutions to aid growth in the industry.

“Insurers are in the best market because of its depth and liquidity,” Mohd. Farid Kamarudin, who helps manage RM1.3 billion (US$428 million) of Islamic assets at Kuala Lumpur-based AmInvestment Management Sdn Bhd, a unit of the fourth-biggest underwriter of sukuk last year, said in a Feb. 7 interview. “This is the only market where you can buy sukuk with maturities of up to 20 years or 30 years.”

Ownership limits

Takaful accounted for 10.9 per cent of Malaysia’s total insurance market as of September, central bank Deputy Governor Mohd Razif Abd Kadir said in Kuala Lumpur on Jan. 28. In contrast, Islamic banking makes up 20 percent of the total banking industry.

Takaful is based on the Shariah principle of mutual assistance, where two parties agree to pay into a fund that will be used to assist each other in times of need.

Assets held by operators of Shariah-compliant insurance in Malaysia reached RM12.4 billion at the end of 2009, with RM3.52 billion raised in premiums, central bank data show.

Courtesy by: Business Times

Amana Takaful plans going public in Maldives

2011-02-08T09:50:00.003+05:00

The Maldivian subsidiary of Sri Lanka's Amana Takaful Insuracne Plc, Amana Takaful (Maldives) Private Limited has applied to be listed in the Maldives Stock Exchange (MSE).

According to the MSE website (www.mse.com.mv) the company has submitted its application and it will be the first foreign owned company and Shariah compliant company that has applied for a listing in MSE.

Once the listing is completed Amana Takaful will become the fifth company listed on the MSE.

Amana Takaful (Maldives) Private Limited started its operations in Maldives in 2004 after receiving a license from the Maldivian Insurance Authority to engage in General Insurance in 2004.

Today the company has grown as one of the largest players in the Maldives providing insurance solutions to key sectors of the government and also non-government organizations.

In collaboration with one of the largest Takaful operators in the world, Malaysia Takaful, Amana Takaful started its Sri Lankan operation in 1998 by offering both General and Family Takaful solutions.

They are the first and only insurance company in Sri Lanka to pioneer the process of refunding surplus at the end of each policy term. The company has a very competitive customer base and has operations throughout Sri Lanka.

Recently a subsidiary company of Amana Group, Amana Bank Limited obtained the license from the Sri Lanka's Central Bank and the Finance Ministry to conduct commercial banking in the country.

The Maldives Stock Exchange first established on 14th April 2002 was operated by the Capital Market Development Authority (CMDA) as part of the regulator.

However to separate the Exchange operation, Maldives Stock Exchange (MSE) was licensed as a private sector exchange by Capital Market Development Authority (CMDA) on 23rd January 2008 under the Maldives Securities Act.

As such the MSE is operated by the Maldives Stock Exchange Company Pvt Ltd, effective from 24th January 2008.

The primary function of MSE is to facilitate companies raising capital through the issue of new securities. The secondary function of the MSE is to provide a regulated market for the trading of existing stocks between investors. The MSE is also the centre for trading, reporting and pricing of the stocks. The trading information is released to the public by the MSE ensuring transparency in market dealings.

The four companies that are already listed on the MSE include the Maldives Transport and Contracting Company Plc (MTCC), Bank of Maldives Plc (BML), State Trading Organization Plc (STO), and the Maldives Tourism Development Corporation.

Courtesy by: Daily mirror

Takaful Brunei Raises Awareness On Products That Offer Protection

2011-02-07T12:54:00.002+05:00

Bandar Seri Begawan - About 80 personnel comprising representatives of RBAF, the Royal Brunei Air Forces and Royal Brunei Navy, as well as civilian personnel from the Ministry of Defence attended a product presentation conducted by Takaful Brunei Am Sdn Bhd (TBA) and Takaful Brunei Keluarga Sdn Bhd (TBK).
In attendance were Deputy Commander, Administration Division, other commanding and senior officers from different divisions, Major Hj Mohd Sheikh Hj Bagol, as well as TBK's General Manager Hj Mohd Shahrildin PD Hj Jaya.

Senior officers from TBA and TBK were also present at the programme that served as part of a road show to raise awareness of Takaful products offered by TBA and TBK as well as fulfilling the government's aspiration to educate the public in becoming a society that saves for its future.

To date this year, TBK and TBA have conducted many road shows for various government agencies and corporate institutions on the importance and benefits of available Takaful products that offer protection and the overall response has been very positive.

Courtesy by: Borneo Bulletin

Al Khaleej Takaful 2010 net profit rises to QR73mn

2011-02-04T09:53:00.002+05:00

Al Khaleej Takaful Insurance and Reinsurance has reported a 7% growth in its 2010 net profit to QR72.84mn as total income grew much faster than expenses.

The company, which is proposing to change its name to Alkhaleej Takaful Group, has suggested 30% cash dividend; which will have to be approved by shareholders at the annual general assembly scheduled on February 21.

Total investment and other income shot up 58% to QR117.40mn while total expenses rose 11% to QR43.95mn, according to its financial statement filed with the Qatar Exchange.

Wakala income jumped almost five-fold to QR50.83mn; net realised gains on sale of available-for-sale investments rose 11% to QR30.87mn; rental income by 31% to QR8.04mn and other income by 71% to QR1.83mn; even as dividend income plunged 12% to QR24.93mn.

The company has reported a QR0.61mn shareholders’ deficit from takaful operations compared with QR33.31mn surplus in the previous year. Total takaful revenues stood at QR44.85mn and expenses at QR45.47mn.

However, for the policyholders, the insurer’s surplus from takaful operations jumped more than three-fold to QR44.02mn. Total takaful revenues were QR105.76mn and expenses were QR61.75mn.

Total assets were valued at QR976.54mn, comprising policyholders’ assets of QR275.65mn and shareholders assets of QR700.89mn.

Total shareholders’ equity stood at QR575.97mn on a capital base of QR142.30mn and earnings-per-share was QR5.12 at the end of December 31, 2010.

Courtesy by: Gulf Times

Japan's Mitsui says eyes stake in Malaysian Islamic insurer

2011-02-03T11:20:00.002+05:00

Tokio Marine is expected to sell its stake in Hong Leong Tokio Marine to the Malaysian shareholder which would then sell it on to Mitsui Sumitomo, both pending regulatory approval, a source said.

Japan's Nikkei newspaper had earlier reported that Tokio Marine was planning to exit its partnership in Hong Leong Tokio Marine due to differences in business strategy. While Tokio Marine wants to sell a broad lineup of life and non-life insurance, Hong Leong is keen to focus on savings-type policies, the paper said.

Mitsui Sumitomo has been looking to expand its overseas operations by forging tie-ups with peers in emerging markets as Japan's non-life insurance market shrinks.

Mitsui Sumitomo Insurance managing executive officer Masaaki Nishikata told Reuters in September that MS&AD Insurance was in talks to buy into several life insurers in Asia as it aims to tap the region's growing economies.

A unit of Tokio Marine halted talks with Malaysia's PacificMas to buy medical insurance provider Pacific Insurance Bhd last July.

The market for Islamic insurance, or takaful, is expected to grow in tandem with rising demand for ethical investments. Total takaful contributions could reach $7.7 billion a year by 2012, Ernst & Young has forecast. But global takaful contributions are less than 1 percent of the total insurance premium spend annually, industry lawyers Clyde & Co have said. ($1 = 81.335 Japanese Yen) (Click on for more Islamic finance stories and for a speed guide) (Reporting by Taiga Uranaka; writing by Liau Y-Sing; editing by Lincoln Feast)

Courtesy by: Reuters

Pak-Qatar Family Takaful business grows

2011-02-02T11:17:00.004+05:00

KARACHI: Pak-Qatar Family Takaful (PQFTL) has recorded 120 percent growth in its Takaful business in 2010 to Rs1.04 billion as compared with previous year’s Rs466 million.

PQFTL recorded 66 percent growth in its branch network to 44 branches in 21 cities of the country.

Pak-Qatar Family Takaful (PQFTL) was the first Takaful company in Pakistan to declare a surplus of 15 percent for its individual customers for 2009.

The company has registered tremendous growth despite economic recession which speaks highly about the acceptance of Takaful by the masses. The company began its operations in 2007.

Courtesy by: The International News

Malaysia AIA AFG Takaful seeks new hires, eyes growth

2011-02-01T12:28:00.003+05:00

The insurer, is owned by the Malaysian unit of AIA and Alliance Bank , will add to its current headcount of 25 as it looks to become among Malaysia's top three family takaful providers within three years, its chief executive Wan Azman Wan Mamat said.

"The potential is that immediately a start-up company like AIA AFG Takaful will have access to a very strong distribution and that will be the differentiator for the company in terms of the growth potential," AIA Bhd chief executive Khor Hock Seng told reporters after officially launching the company.

Wan Azman said Etiqa Takaful, which is owned by Mayban Fortis, a joint-venture between Malaysia's largest lender Malayan Banking and financial group Fortis , is Malaysia's biggest Islamic family insurer with about 25 percent market share. Prudential is second with about 16-18 percent share.

"Increasingly bancassurance is going to play a major part of our business," said Alliance Financial Group's group chief executive Sng Seow Wah.

"With this tie-up, I hope to be able to extend beyond the takaful business with AIA to do other bancassurance products which will extend to businesses."

The Islamic insurance industry's growth has been held back by a shortage of sharia-compliant instruments that insurers can invest in and some doubts about whether takaful really complies with Islamic guidelines.

The takaful penetration rate in mostly Muslim Malaysia was only 10.9 percent in September 2010. The Southeast Asian country has the world's second-largest takaful market and its total assets of $3.2 billion accounted for 26 percent of total global takaful assets in 2009, according to central bank estimates.

AIA AFG Takaful is one of four takaful companies that received licences from the Malaysian central bank late last year as the authorities look to accelerate the industry's growth.

Total takaful contributions could reach $7.7 billion a year by 2012, Ernst & Young has forecast. But global takaful contributions are less than 1 percent of the total insurance premium spend annually, industry lawyers Clyde & Co have said.

Courtesy by: Reuters

TOP REGIONAL AWARD FOR TAKAFUL COMPANY

2011-01-31T09:27:00.006+05:00

MANAMA: Solidarity General Takaful company has won a top regional award at a ceremony held in Dubai. It was named Bahrain Insurer of the Year and for the second time running was named the best Takaful Insurer of the Year at the MENA Insurance Awards Ceremony.

Solidarity General Takaful is a subsidiary of one of the largest Takaful groups in the world, Solidarity Group Holding.

The MENA Insurance Awards are hosted by MENA Insurance Review magazine, an authoritative and highly-regarded business title that has become a key feature in the region's insurance event calendar.

The awards recognise Solidarity's commitment to its customers, as well as the company's innovation and quality in its product offering, its strong financial positioning in its core insurance business and its success in building a solid platform for further growth.

"We are delighted to have been named Bahrain Insurer of the Year and for the second consecutive year the best Takaful Insurer," said Solidarity chief executive Ashraf Bseisu.

"The awards serve to further reinforce our long-standing commitment and drive to better serve our clients, to whom we owe these awards in the first place," he said.

"The awards are a reflection of the high level of recognition that Solidarity has attained, amongst both its peers and its clients, as both a leading insurer in Bahrain and a leading Takaful insurer in the region," said Mr Bseisu.

"The fact that we have been singled out for these two prestigious industry awards is something we can all be justifiably proud of," he said.

"The awards are all the more significant because it is based in large part on our ability to demonstrate a strong commitment to our customers," said Mr Bseisu.

"This ability is a direct consequence of the devotion, dedication and world-class expertise of every member of the Solidarity team," he said.

Courtesy by: Gulf Daily News

Islamic banking, shariah compliance hallmark in business: Naved Khan

2011-01-28T09:27:00.004+05:00

KARACHI - With the highly encouraging response world-wide in Islamic Banking, Faysal Bank has the history to be one of distinguished institutions having Sharia compliant banking and it has received tremendous response from the investors, depositors and businessmen taking interest in the specially designed “window on Islamic Banking” of the bank.

In an interview with Naved A. Khan, President and Chief Executive Officer of Faysal Bank with The Daily Mail, he explained the strategic growth and development of Islamic banking with Faysal Bank Ltd in Pakistan. Now the Faysal Bank with acquisition of RBS (Royal Bank of Scotland) its operations and financial strength has further improved.

Faysal Bank Limited and its key stake holders have history in Islamic Finance that leads to committed entry in Islamic Banking in Pakistan with its brand Faysal Barkat Islamic Banking. Barkat Islamic Banking will be one of the key areas of focused growth in the next 5 years for Faysal Bank Limited. We are fully engaged and committed in development of Islamic Banking in Pakistan with a dedicated division having its own product group and distribution set-up equipped with well trained human capital, supervised by Shariah Advisor and supported by Shariah Consultant to ensure Shariah Compliant business in line with vision and directives of State Bank of Pakistan.

Naved A. Khan, President of Faysal Bank said, Islamic Banking Business (IBB) has proven its potential globally as well as in Pakistan. There are huge growth opportunities in Pakistan. Over the past decade, Islamic banking has grown at double digit rate resulting in 6% share in the total banking industry. The following are the key drivers of growth:

Large Islamic Population: Pakistan comprises of over 95% Muslim population; hence the significance of having a foothold in such a huge target audience cannot be ignored. The large Muslim population and the strong faith towards religion will keep on fuelling Islamic banking growth in double digits. We could expect Islamic Banking business in Pakistan to capture 25 -30% market share in this decade.

Spiritual Attraction: Besides the economic factors, the emergence of Islamic finance is related to revival of Islam and desire of Muslims to live all aspects of their lives in accordance with the teachings of Islamic law or Shariah.

Government & Regulatory Support: Government and SBP have been supportive of the development of a strong Islamic financial sector alongside conventional banking system.

Increase in the distribution outlets of existing Islamic financial institutions and the entrance of conventional banks in this business is clear indication that Islamic Banking will keep on growing in line with SBP 2012 vision.

Faysal Bank has launched its Islamic banking in September 2009 with first branch in Karachi under the brand of Barkat Islamic Banking.

Total number of dedicated Islamic banking branches is 13 covering 6 cities across Pakistan. Acquisition of RBS has complemented growth of Islamic banking business at FBL. Within a short span of one year Barkat Islamic banking has captured a sizeable number of customers by offering major Islamic banking products and services. Faysal Bank has always been customer centric and has provided products and solutions which are tailor made to address its target market. Our focus and challenge has always been to exceed the expectations of our existing and potential customers consistently. Barkat Islamic Banking will continue this with further growth in distribution and product lines.

Conventional banking is in business for over 3 centuries. They have clear edge over systems, infrastructure, experienced human resource and vintage. Simultaneously, key challenges that Islamic Banking faces like Shariah interpretations, scarcity of Shariah experts, greater time required in product development and execution, short-term liquidity & risk management typical of an evolving industry.

However, Islamic banking institutions in Pakistan as well as in other parts of the world have introduced new and advanced Islamic products and structures which are at par with conventional banking business; whilst full fill the financial solutions of its customers. Sukuks on Ijarah and Diminishing Musharakah financial models are being used to replace TFCs and bonds and are receiving very good response from the market. Government of Pakistan has introduced billions of rupees of Sukkuks in recent months that have been oversubscribed.

Courtesy By: pakistan daily Mail

HSBC in tie-up with Allianz Takaful

2011-01-27T10:15:00.001+05:00

HSBC and Allianz Takaful, a major player in the Takaful insurance, have jointly announced a Bancassurance partnership to promote Islamic insurance products in Qatar.
Javed Akhtar, HSBC senior area sales manager said: “We developed this strategic partnership with a leading and established Takaful product provider in recognition of our customers’ need to have access to quality Takaful products. We are very confident that this tie-up will enable us to better serve the needs of our customers.”
Through qualified financial planning managers located in a network of branches around Qatar, the bank will promote and sell ‘family Takaful products’ comprising plans for protection, savings, investment and children’s education. The products are denominated in dollars and riyals and are available to both conventional and Islamic banking customers.
Commenting on the partnership, Abdulrahman Khalil Tolefat, Allianz Takaful chairman said: “HSBC is a global partner for Allianz and we are one of the bank’s preferred services providers. We are very proud to have formed this partnership here in Qatar and to be able to offer our products to HSBC and Amanah customers. HSBC customers will now get access to Allianz’ state-of-the-art Shariah-compliant products and services through HSBC relationship managers in their branches.”

Courtesy by: Gulf Time

Sharia-compliant Insurance company launched

2011-01-26T09:33:00.002+05:00

A new Sharia compliant insurance company which will offer group mutual guarantee insurance services for individuals against losses or damages has been launched.

Takaful Insurance of Africa (TIA) will provide a platform for Kenyans to insure themselves under mutual guarantee whereby every participant will contribute a sum of money to a common fund.

Chief executive officer, Hassan Bashir said Takaful was a fully fledged insurance company that would ensure Kenyans put their money in a pool and bear the risks together.

"Takaful intends to introduce an innovative range of products and services that will cater for both the fortunate and less fortunate in the society through risk funds that shall be contributed by members and shall again be fully owned by the same members," said Bashir.

He said Takaful insurance followed Africa's business model based on Sharia principles and was meant to serve all Kenyans regardless of their religious background. The products will be availed in Islamic banks and other designated brokers across the country.

CIC insurance chief financial officer Peter Mwaura who attended the launch Wednesday said the relationship among members of TIA would be that of co-operation for mutual benefit.

"The individual members contribute to an organized and well managed fund whose core objective will be for the welfare of the entire group. Thus the relationship is one of establishing strength through togetherness," said Mwaura.

However, Mwaura recognized the greatest challenge for the company emerging from harmonization of the regulatory environment which will be needed for mitigation of financial risks ethically, a dimension that has never been there before.

Courtesy By: Kenya Broadcasting Corporation

Takaful International goes online

2011-01-25T09:50:00.003+05:00

MANAMA: Bahrain-based Takaful International, the pioneering takaful company in the region, on Sunday embarked on a new journey by introducing first of its kind service in Bahrain called e-takaful.

Being the first takaful company to offer on-line services at its portal www.etakaful.bh will immediately benefit both individual and corporate clients.

Announcing the innovative step, Essam Al-Ansari, general manager, during a press conference held at Takaful House in Seef District, said the company would continue to lead the way in takaful segment.

“We are just days away to kick start company’s branch operations in Doha, thanks to the company’s leadership and vision of the management to reach out all potential markets in the GCC,” Al-Ansari said.

“Everything is put in place for Doha operations and we just awaiting the license to open the first-ever Takaful International’s branch outside Bahrain,” he added.

“We have noticed the markets need for technologically advanced services that provides an effective, safe and easy insurance service process,” said Al-Ansari, who was joined by A. Aziz Al-Othman, deputy general manager and Ali Ebrahim M. Noor, deputy general manager family Takaful, healthcare and Takaful centers.

“The company continues to innovate and improve all its insurance products and services in order to ease all procedures for customers and keep pace with the current era” he added.

Abdul Aziz Al-Othman, deputy general manager of the company, said that the clients can obtain quotations for various services such as car, travel, home, domestic and marine insurance and other insurance services.

“It is also possible to obtain the documents electronically for renewal of all policies; with the possibility of reporting of claims as well as customer suggestions are welcome. Further features allow review of policies and claims and for updating personal data,” he added.

In addition, the customers can retrieve policy quotes in few minutes, by filling the form of the insurance service, and paying the premium through a protected Web page; after completing the form all data will be sent and the policy will be delivered to the insured in no time by express mail service (private) in any place within Bahrain.

“The Kingdom of Bahrain is at the top of the ladder of in terms of Internet penetration in the Middle East and the study indicates that percentage of Internet users have exceeded 32 per cent which is around 435,000 users. We strive to continue to provide the best services to our customers and this website is developed to serve them promptly and effectively, in addition to saving time and effort,” he added.

“As a lot of salvage coming out in many areas of takaful services, the customers can also benefit from out e-bidding portal by using online services and get the information of bidding even through SMS,” added Ali Ebrahim Noor.

Takaful International Company founded in 1989 offers variety of insurance coverage which is in line with the foundations of the Shariah and meets the requirements of this age. The company has received BBB rating with a long-term stable outlook from the Standard & Poor’s.

Courtesy by: Arab News

PQFTL, HBL Islamic Banking sign accord

2011-01-25T09:45:00.002+05:00

KARACHI: Pak-Qatar Family Takaful Ltd (PQFTL) and HBL Islamic Banking inked an accord to provide family (Life) Takaful coverage to HBL-Islamic Banking Al-Ziarat Account (Hajj and Umrah Savings Plan) holders. The contribution for Life Takaful coverage will be made by HBL. P Ahmed CEO PQFTL and Muhammad Aslam head of Islamic Banking HBL said HBL Al-Ziarat Account is a scheme where the plan holders could save for Hajj and Umrah to undertake the journey at the time of their choice. As an incentive HBL Al-Ziarat Account will have higher weightage than PLS account in addition to free life cover. In case of death of an account holder, PQFTL will pay the remaining contribution towards the scheme and the nominee of the plan holder will get lump sum amount to perform Hajj-e-Badal or Umrah in place of the deceased. HBL will initially offer this product from 19 stand-alone dedicated Islamic Banking branches and 206 Islamic Banking windows throughout Pakistan.

ourtesy by: Daily Times

BNP’s Dalmau Discusses Challenges in Islamic Product Innovation

2011-01-21T09:46:00.002+05:00

Rafael Dalmau, head of Shariah- compliant portfolio management at BNP Paribas in Singapore, discusses product innovation in an e-mailed response to Bloomberg questions.

On the drive for new products:

“The Islamic banking and financial sectors continue to evolve and part of that growth path involves the need to create new products. It is not always a lack of investment alternatives that motivate institutions to offer structured products. Many times, it is simply the need to keep pace with the demands of a more sophisticated client. Many of the traditional and basic definitions of Islamic financial transactions can be viewed already as structured products under conventional rules.

On setting standards for derivatives:

“The need to achieve global standards is not as urgent as thought of a few years ago. That is not to say, that it would not be useful and practical. There are still many challenges ahead of us before we can standardize Islamic derivatives. We, the market, need to define what it really means to have a derivatives market and whether or not, these transactions comply both in letter and spirit with Shariah principles.

“All market participants need to make clear what are the objectives behind the creation of Islamic derivative transactions? Are they going to be used simply to leverage or speculate on other Islamic markets, or are they going to be used for purposes of risk management? They can be abused as we saw in the recent times in the conventional markets.”

On the role of Islamic scholars:

“The scholars are going to be, and should be, the main drivers in the evolution of the Islamic derivatives markets. If there is ever an Islamic derivatives market that may allow more efficient risk management, it is likely to help in the growth of the Islamic capital markets. We are still far away from that point.”

Courtesy by: Bloomberg

Bourse charts rise and fall of Takaful shares

2011-01-20T11:30:00.005+05:00

What a difference a day makes with the rise and fall of Takaful Emarat Insurance the story on the bourses this morning.

Shares of the insurance firm, listed in Dubai, declined by more than three per cent to 78 fils at 10:40amm this was a reverse on yesterday when Takaful gained 7.8 per cent.

"The price is good considering the past period," said Rami Awwad, operations manager at Al Awael Securities in Abu Dhabi. Shares have fallen by 12 per cent in the last 3 months. "The chances are it will recover, it is a well liked stock among local investors, but volumes are not as high as leading firms," he said.

EmiratesNBD, which has the second biggest weighting on its emirate's index, lost 2 per cent to Dh2.94 a share. Emaar Properties, dropped 0.2 per cent to Dh3.52.

The Dubai Financial Market General Index declined by 0.4 per cent to 1657.98.

In Abu Dhabi, losses were led by Abu Dhabi National Energy, also known as Taqa, which fell 2 per cent to Dh1.45. Property firms fell, after The National reported yesterday that rents in Abu Dhabi fell as much as 16 per cent in the last three months of last year. Aldar Properties lost 1.6 per cent to Dh2.41 a share. Sorouh Real Estate lost 1.7 per cent to Dh1.66 a share.

Crude climbed 1 per cent to $88.93 a barrel.

Elsewhere in the region, Kuwait's measure lost 0.3 per cent to 6939.60. Bahrain's measure remained unchanged at 1428.55. Oman's index and Qatar's index also remained flat at 6949.36 and 9019.71 respectively. The Saudi Tadawul All-share Index was unchanged at 6723.31.

Courtesy By: The National

Pakistan Funds Push for More Sukuk Sales to Invest Cash: Islamic Finance

2011-01-19T09:32:00.003+05:00

Fund managers in Pakistan are urging the government to increase offerings of Islamic debt, saying a 13-fold rise in sukuk sales this year isn’t enough for them to invest inflows of cash.

The central bank plans to auction 45 billion rupees ($525 million) of three-year sukuk in the domestic market on March 1 and another 55 billion rupees in the three months ending June 30. The sales will take the total for the fiscal year to 189 billion rupees, compared with 14.4 billion rupees in the previous 12 months.

Pakistan’s Islamic banking assets climbed an average 30 percent annually in the past four years to 411 billion rupees as of June 2010, 6 percent of the financial industry’s total, according to a central bank estimate in October. Pakistan aims to double that share to 12 percent by 2012 and plans to issue two more Shariah banking licenses that will take the total to seven, the monetary authority said in October.

“The government has relied too much on the conventional debt market without realizing how much liquidity is in the Shariah-compliant industry,” Sajjad Anwar, who helps manage the equivalent of $187 million at NBP Fullerton Asset Management Ltd., a unit of the nation’s biggest lender National Bank of Pakistan, said in a Jan. 11 interview from Karachi. “Islamic funds and banks are just waiting.”

Banking Licenses

Pakistan needs to finance a budget deficit that may reach 6 percent of gross domestic product, or 1 trillion rupees this fiscal year, exceeding the government’s target of 4 percent, according to a report from the State Bank of Pakistan on Oct. 25. The shortfall was 6.3 percent last year, according to data on the Finance Ministry’s website.

The yield on the three-year debt will rise to 13.89 percent from 13.39 percent at the prior offering on Dec. 13 as the central bank may increase interest rates to temper inflation, said Karachi-based Abdullah Ahmed, treasurer at Meezan Bank Ltd., the nation’s biggest Shariah-compliant lender.

“In an environment when everyone is expecting a hike in interest rates, the demand for such paper will remain high,” Ahmed said in an interview on Jan. 12. “Islamic banks are desperate to deploy their funds.”

Inflation stayed above 15 percent for a fourth month in December after unprecedented floods in August destroyed roads and damaged crops worth $3.3 billion.

Inflation to Slow

“The inflation rate will start falling from next fiscal year to average 13 percent as the government aims to reduce borrowing and impose additional tax measures,” Mohammed Sohail, chief executive officer at Topline Securities Ltd., said in an interview yesterday from Karachi.

The State Bank of Pakistan increased its discount rate by half a percentage point to 14 percent on Nov. 29, the third policy tightening since July. The central bank has raised borrowing costs from a record low 7.5 percent in 2005. Policy makers will increase the rate by 50 basis points to 14.5 percent at the Jan. 29 meeting, according to Meezan Bank’s Ahmed, who said he will buy sukuk at the next auction.

Pakistan’s central bank uses the yield on its six-month non-Islamic treasury bills as a benchmark for pricing debt. The yield rose to 13.55 percent at a sale on Jan. 12, nine basis points more than the previous offering. The rate was 12.05 percent a year ago, Bloomberg data shows.

Global sales of sukuk, which pay asset returns to comply with the religion’s ban on interest, fell 15 percent to $17.1 billion in 2010, according to data compiled by Bloomberg. Issuance reached a record $31 billion in 2007.

Islamic Debt Returns

Shariah-compliant bonds returned 12.8 percent last year, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows. Debt in developing markets gained 12.2 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.

The difference between the average yield for emerging- market sukuk and the London interbank offered rate shrank eight basis points this month to 281, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. Average yields dropped 13 basis points to 4.61 percent.

The yield on Malaysia’s 3.928 percent sukuk maturing in June 2015 rose two basis points to 2.8 percent today, according to prices from Royal Bank of Scotland Group. The extra yield investors demand to hold Dubai’s government sukuk rather than Malaysia’s narrowed one basis point to 330 today, Bloomberg data show.

Government Debt Sale

The government sold 37.2 billion rupees of Islamic securities on Dec. 13 and got orders for 57.7 billion rupees. At the previous sale on Nov. 8, it raised 51.8 billion rupees after receiving offers of 64.7 billion rupees. Pakistan had local- currency debt of 5.35 trillion rupees outstanding, including 94 billion rupees of sukuk as of November 2010, according to the central bank’s website.

Pakistan is attracting investors even as the country battles an eight-year insurgency with militants in its border region with Afghanistan. The U.S., a major financial donor, is pushing President Asif Ali Zardari to intensify that crackdown. A policeman assassinated secular politician Salman Taseer on Jan. 4 for opposing an Islamic blasphemy law.

Albaraka Banking Group BSC, Bahrain’s biggest publicly traded Islamic lender, boosted its branch network to 90 after acquiring Pakistan’s Emirates Global Islamic Bank Ltd. in 2010. Meezan Bank, controlled by Kuwait’s Noor Financial Investment Co., plans to open 225 new outlets in the next four years.

The central bank predicts the economy will expand 2.5 percent this fiscal year, faster than last year’s 1.2 percent. The Karachi Stock Exchange KSE100 share index reached a 2 1/2- year high today. The gauge rallied 28 percent last year after soaring 60 percent in 2009.

“For Islamic banks, sukuk will remain attractive because the sovereign notes offer the least risk and high returns,” Pervez Said, chief executive officer of Dawood Islamic Bank, 35 percent owned by Bahrain’s Unicorn Investment Bank BSC., said in an interview yesterday from Karachi. “Political and security problems have always been associated with Pakistan. The issue is where do we invest?”

Courtesy by: Bloomberg

Bahrain receives key recognition to be member of IAIS

2011-01-18T10:11:00.003+05:00

The Central Bank of Bahrain (CBB) is pleased to announce that the Kingdom of Bahrain has been selected to be a member of the Executive committee of the International Association of Insurance Supervisions -IAIS; a key recognition for CBB's regulatory initiatives in the area of insurance and takaful.
This announcement was made during the recent IAIS meeting and recognized Bahrain's efforts amongst 17 Mena different regulators in the formulation or enforcement of insurance standards as a regulator/supervisor.

This membership was granted to Bahrain for a period of two years and names the Kingdom of Bahrain as the representative for the Middle East & North Africa (MENA) region among the other members of the IAIS.

"We are delighted to receive this recognition on behalf of Bahrain, which is a demonstration of international recognition for the pioneering work being undertaken by the CBB in the area of insurance regulation," said Mr. AbdulRahman Al Baker - Executive Director of Financial Institutions Supervision at the CBB.

"The CBB is committed to the development and advancement of the conventional and Islamic insurance sector and to reinforce Bahrain's status as the leading centre for insurance in the MENA region," Mr. Al Baker added.

Recent initiatives by the CBB have included the development of the sales representative Insurance certificate, which enables the industry to develop their human resources and better facilitate the growth in specialized areas of insurance.

The CBB Insurance Rulebook also contains the region's first comprehensive regulatory framework specific to Islamic insurance and reinsurance (takaful and retakaful) companies.

International Association Insurance Supervisors (IAIS) Established in 1994, the IAIS represents insurance regulators and supervisors of some 190 jurisdictions in nearly 140 countries, constituting 97% of the world's insurance premiums. It also has more than 120 observers.

"The CBB is committed to maintaining its international reputation for sound yet market friendly regulation and supervision and we look forward to continuing to work with market players in providing an environment conducive to the growth and advancement of the financial services industry," said Mr. AbdulRahman Al Baker.

Courtesy by: Ame Info

U.K. Cancels Sukuk, Focus on Economic Growth: Islamic Finance

2011-01-17T14:22:00.002+05:00

The U.K., Europe’s largest market for Shariah-compliant financial products and services, canceled what would have been the first sale of sovereign Islamic bonds by a Western federal government as issues fell 15 percent in 2010.

“The U.K. government has decided not to issue sovereign sukuk because it is judged not to provide value for money,” a spokesman for the U.K. Treasury in London, said in an e-mailed response to questions Jan. 13. “It will keep the situation under review.” The Treasury has been mulling the sale of Islamic bonds denominated in pounds since at least April 2007.

Growth in Europe’s Islamic financial hub has been hampered by slowing economic expansion and the government’s attempt to plug a budget deficit, according to Moody’s Investors Service. The German state of Saxony-Anhalt became the first European borrower to sell bonds adhering to Islamic law in August 2004 with 100 million euros ($134 million) of five-year sukuk, according to data compiled by Bloomberg.

“This will discourage other governments from selling sukuk,” John A. Sandwick, a Geneva-based Islamic wealth and asset management consultant who advises companies and governments in Asia, Europe and the Middle East, said in a telephone interview Jan. 13. “If the U.K. says that sukuk aren’t value for money, it’s likely other governments may reassess their positions, and the number of sovereign issuers new to Islamic finance may drop.”

‘Costs Outweigh’

Global sales of Shariah-compliant bonds, which are based on the exchange of asset flows rather than interest, dropped to $17.1 billion last year. Issuance reached a record $31 billion in 2007. Kazakhstan, the former Soviet republic that last sold international debt in 2000, delayed plans to offer sovereign Islamic bonds because the government doesn’t need the funds, Deputy Prime Minister Aset Issekeshev said at a conference in Abu Dhabi yesterday. Luxembourg may sell sukuk, central bank Governor Yves Mersch said in Bahrain in May.

The U.K. Treasury ordered a study in April 2007 into the possibility of issuing Islamic bonds. The government introduced tax concessions for the debt in its annual budget in 2007 and authorities extended tax breaks to Islamic mortgages in 2003. The Treasury last July reiterated the previous government’s 2008 position that a sovereign sukuk sale, which would provide a benchmark for issuance, didn’t offer “value for money.”

“The government recognizes the benefits of the product for the Islamic banking sector, but believes that the costs outweigh the benefits relative to the issuance of gilts,” the Treasury spokesman said.

Cheaper Borrowing

Britain is currently borrowing at a rate that is lower than the London interbank offered rate, or Libor, according to Bloomberg asset swap calculation. If investors swap the fixed- rate offered by 10-year gilts into a floating rate, the security yields 2.9 basis points below Libor, the data show.

The yield on Dubai’s 6.396 percent sukuk maturing in November 2014 dropped 2 basis points to 6.16 percent on Jan. 14, according to Bloomberg data. The extra yield investors demand to hold Dubai’s government debt rather than Malaysia’s narrowed eight basis points, or 0.08 percentage point, to 330 this month, the data show.

“The U.K.’s initial drive to issue sukuk was more politically and socially driven versus economic given the significant Muslim minorities in the country,” Khalid Howladar, a Dubai-based senior credit officer at Moody’s, said in an e- mailed response to questions Jan. 12. “Given recent stresses on the economy and government finances, such motives are now secondary to the need to raise funds efficiently.”

About 2.9 million people in the U.K. are Muslim, the Washington-based Pew Research Center’s Forum on Religion & Public Life said in a report this month. It has a total population of 62.3 million, according to 2010 estimates from the U.S. Census Bureau on Dec. 28.

Slowing Growth

U.K. economic growth slowed more than initially estimated in the third quarter. Gross domestic product rose 0.7 percent from the previous three months, the Office for National Statistics said Dec. 22 in London. That compares with an initial estimate of 0.8 percent and second-quarter growth of 1.1 percent. The Bank of England on Jan. 13 maintained emergency stimulus for the economy.

“The U.K. government is in retrenchment mode and is not looking to expand the sphere of its activities,” Frances Hudson, who helps oversee about $220 billion as head of global thematic strategy at Standard Life Investments in Edinburgh, said in an e-mailed response on Jan. 13.

Corporate Sales

European companies may still turn to the Middle East. The region has more than 400,000 millionaires, Cap Gemini SA and Bank of America Corp.’s Merrill Lynch unit said in a world wealth report last June. Their combined wealth grew 5.1 percent in 2009 to $1.5 trillion, the report said.

The Bank of London and The Middle East Plc, a Shariah- compliant bank, is in discussions with two U.K.-based companies to sell as much as 200 million pounds of Islamic bonds in the next six months, Nigel Denison, director and head of markets at the London-based bank, said in an interview in Manama, Bahrain Nov. 24.

“It’s disappointing that they’re not looking at it more actively because we feel it would provide value for money,” Denison said in a telephone interview from London Jan. 14. “The fact that it’s still under review is encouraging.”

Global Shariah-compliant bonds returned 12.8 percent last year, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows. Debt in emerging markets gained 12.2 percent, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.

Gatehouse Bank Plc, a London-based Islamic investment bank, will help two companies sell as much as 200 million pounds of sukuk in the first quarter of this year, Chief Executive Officer Richard Thomas said in Manama Nov. 23. International Innovative Technologies Ltd., a clean energy company in Gateshead, sold a $10 million, four-year convertible sukuk in July, the country’s first corporate Islamic bond.

“A lot of dithering, dithering, dithering, then nothing,” Sandwick said. “The sukuk market would’ve been deeply enriched and rewarded with a U.K .sovereign or a government municipal issuance. It’s a sad day for everyone.”

Courtesy by: Bloomberg

Malaysia Insurers Hindered by Lack of Sukuk: Islamic Finance

2011-01-14T09:38:00.001+05:00

The lack of long-term investment products is undermining growth in Malaysia’s Islamic insurance industry, spurring calls for more sukuk maturing beyond 10 years in the world’s biggest market for the debt.

The country’s 13.9 billion ringgit ($4.5 billion) of insurance assets that comply with Shariah law made up 9 percent of the 154 billion ringgit total as of July 2010, according to central bank data. Malaysia has 293.2 billion ringgit of outstanding Islamic bonds, with 41.5 billion ringgit maturing in 10 years and more, according to data compiled by Bloomberg.

Institutions offering services known as takaful need to match long-term liabilities and a greater availability of sukuk would help firms expand their range of insurance, according to Kuala Lumpur-based HSBC Amanah Takaful Malaysia) Sdn Bhd. The industry also lags behind banking in the United Arab Emirates, said Ahmed Aljanahi at Dubai-based Noor Takaful.

“We need long-term sukuk because we can’t be aggressive in equities or park most of our funds in deposit accounts or just short-term paper,” Hafidz Hamzah, who helps manage 12 million ringgit as head of investment at Kuala Lumpur-based Great Eastern Takaful Sdn. Bhd., which received its license last year, said in an interview Jan. 5. “That’s hampering returns and too much exposure to equities can be very volatile for our funds.”

New Licenses

Takaful is based on the Koranic principle of mutual assistance, whereby policy holders contribute a sum of money to a common pool managed by the company. The funds are used to pay for claims and any excess is returned to customers.

Malaysia’s Islamic insurance assets grew 20 percent in the first seven months of 2010 from a year earlier, according to central bank data. Bank Negara Malaysia issued four new Shariah- compliant life-insurance licenses last year, bringing the number of takaful firms to 12.

Global takaful contributions increased 29 percent to an estimated $5.3 billion in 2008 from a year earlier, according to a report published in April 2010 by Ernst & Young LLP. Takaful contributions in the six-nation Gulf Cooperation Council rose 31 percent to an estimated $3.7 billion the same year, the report said.

‘Chicken & Egg’

“It’s a chicken and egg situation, if you have more long- dated sukuk then there are more assets for takaful operators to invest in,” Rafe Haneef, managing director of global markets at HSBC Amanah, whose parent was the second-largest underwriter of Islamic bonds last year, said in an interview Jan. 5. “Growth in takaful and the sukuk industry will mutually enrich both sectors.”

Global sales of sukuk, which pay returns based on asset flows to comply with the religion’s ban on interest, fell 15 percent in 2010 to $17.1 billion, according to data compiled by Bloomberg. Issuance reached a record $31 billion in 2007.

Malaysia’s 10-year development plan will increase sales of longer-maturity debt as companies need to spread out their financing, according to RAM Rating Services Bhd., the biggest of the nation’s credit rating firms. The government has identified $444 billion of private-sector led projects including the building of an underground rail system, a nuclear power plant and the expansion of the road network.

“With more infrastructure projects, that’s going to accelerate the growth of long-term sukuk,” Zakariya Othman, head of Islamic finance at RAM Rating, said in an interview in Kuala Lumpur yesterday.

Returns Declined

Shariah-compliant bonds returned 12.8 percent last year, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows, compared with 19.8 percent the previous year. Debt in emerging markets gained 12.2 percent, from 29.8 percent in 2009, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.

The difference between the average yield for sukuk in developing nations and the London interbank offered rate widened two basis points to 292 since Dec. 31, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. The spread narrowed 178 basis points, or 1.78 percentage points, last year.

The yield on Malaysia’s 3.928 percent sukuk maturing in June 2015 declined three basis points to 2.87 percent yesterday, according to prices from Royal Bank of Scotland Group. The extra yield investors demand to hold Dubai’s government sukuk rather than Malaysia’s widened two basis points to 336, Bloomberg data show.

Noor Takaful, the holding company of Noor Takaful General PJSC and Noor Takaful Family PJSC, in Dubai is talking with investment banks in the Persian Gulf to come up with new products for the Islamic insurance industry, Ahmed Aljanahi, the managing director, said in an interview Jan. 6.

“We are expecting the more well-established investment banks to come up with the right product for the medium to long- term to cater for the takaful industry worldwide, not just for the U.A.E.,” said Aljanahi. “That would take, I would say, four to five years.”

Malaysia Sukuk Sales

Sales of Islamic bonds from the GCC, which includes U.A.E. and Saudi Arabia, dropped 32 percent last year to $4.5 billion, Bloomberg data show. Issuance of ringgit-denominated sukuk in Malaysia fell 11 percent to 28.5 billion ringgit.

Takaful companies are seeking more investments in order to roll out products that provide longer-term coverage such as retirement plans, said Leonardo Zanolini, chief operating officer at HSBC Amanah Takaful Malaysia Sdn. Bhd., a joint venture between HSBC Insurance (Asia Pacific) Holdings Ltd., Jerneh Asia Bhd. and the Employees Provident Fund.

“As the market grows, you would expect the relevance of takaful operators participating in the sukuk market to grow because they need long-term assets to match their long-term liabilities,” Zanolini said Dec. 30 in a telephone interview.

Courtesy by:Bloomberg

In 2011, shall we see the emergence of Islamic Banking?

2011-01-12T09:30:00.002+05:00

Recent reports have indicated that the central bank will soon move to regulate an Islamic commercial bank. What exactly is involved in Islamic banking?

Globally, the assets of Islamic banks have been expanding at double-digit rates for a decade and Islamic banking is increasingly becoming a visible alternative to conventional banks in Islamic countries and countries with many muslims.
Islamic banks serve muslim customers, but are not religious institutions. They are profit-maximising intermediaries between savers and investors and offer custodial and other traditional banking services. The constraints they face are, however, different and are based on Shariah law. There are four main features that differentiate Islamic banking from the conventional banks.

Prohibition against interest (Riba) is the major difference between Islamic and traditional banking. Islam prohibits Riba on the grounds that interest is a form of exploitation and is inconsistent with the notion of fairness. This implies that fixing in advance a positive return on a loan as a reward for the use of one’s money is not allowed.

Prohibition against games of chance (Maysir) and chance (gharar): Islamic banking bars speculation - increasing wealth by chance rather than productive effort. Maysir refers to avoidable uncertainty; for example, gambling at a casino. An example of gharar is undertaking a business venture without sufficient information.

Prohibition against forbidden (Haram) activities: Islamic banks may finance only permissible (Halal) activities. Banks are not supposed to lend to companies or individuals involved in activities deemed to harm society (for example, gambling) or prohibited under Islamic law (for example, financing construction of a plant to make alcoholic beverages).

Payment of some of the bank’s profits to benefit society (Zakat): Muslims believe in justice and equality in opportunity (not outcome). One way they do this is to redistribute income to provide a minimum standard of living for the poor. Zakat is one of the five tenets of Islam. Where Zakat is not collected by the state; Islamic banks donate directly to Islamic religious institutions.
In countries with significant muslim communities like Uganda, many large segments of muslims do not have access to adequate banking services-often because devout muslims are unwilling to put their savings into a traditional financial system that runs counter to their religious principles. Islamic banks seek to provide financial services in a way that is compatible with Islamic teaching, and if Islamic banks can tap that potential clientele, that could hasten economic development in these countries.

There is evidence of close correlation between financial sector development and growth. Countries whose financial systems offer a variety of services tend to grow faster. Banks, whether Islamic or traditional, play a fundamental economic role as financial intermediaries and as facilitators of payments.
The rise of Islamic banking has contributed to economic development in two main ways. One key benefit is increased financial intermediation. In Islamic countries and regions, large segments of the population do not use banks. The Islamic world, as a whole, has a lower level of financial development than other regions—in part because conventional banks do not satisfy the needs of devout Muslims.

Moreover, because Islamic banking requires borrowers and lenders to share the risk of failure, it provides a shock-absorbing mechanism that is essential in developing economies. A mechanism that allows the sharing of business risk in return for a stake in the profits encourages investment in such an uncertain environment and satisfies Islam’s core tenet of social justice. If Islamic banking can emerge, Muslim businesses stand to benefit.

Capital Standards Rating (CSR) assigns BB to Al Safat Takaful Company

2011-01-10T12:25:00.003+05:00

Kuwait: Capital Standards Rating Co. (CSR) has assigned an Insurer Financial Strength Rating (IFSR) of 'BB' and a National rating of 'BBBkw' to Al Safat TakafulAl Safat TakafulAl Safat Takaful Insurance Company
Al Safat Takaful
Kuwait | Financial Services
News | Profile | Officers
Company K.S.C. (closed). The outlook is stable. This is the first time that CSR rates Al Safat. The rating is based on the consolidated financial statements until June 2010.

The ratings reflect Al Safat's adequate capitalization, improving operating performance and relatively sufficient liquidity position. The company implements a conservative reserve accumulation strategy and relies heavily on reinsurance for its marine & aviation and general accident segments. Al Safat is expanding its insurance business and the company's underwriting performance indicators are improving. The company's rating is however constrained by its small market share of the Gross Premiums Written (GPW) and concentration in the Kuwaiti market. The investment in equities and unlisted funds further adds to the volatility of the company's financial profile. The outlook reflects CSR's view of the continued improvement in the company's insurance underwriting performance.

Al Safat Takaful Insurance CompanyAl Safat Takaful Insurance Company was established in 2005 according to Islamic Sharia and offers takaful insurance services in Kuwait. The company provides Islamic insurance in various segments such as marine & aviation, motor vehicles, fire and general accident, life and health. The major shareholders (not less than 10% stake) of the company are; Al Safat Group (28.9%), Al Ghanim Group (12.5%), Al Kharafi Group (10%), Commercial Bank of Kuwait (10%), Investors Group Holding (10%), Kuwait Finance & Investment Company (10%), and Commercial Real Estate Company (10%). This diverse group of prominent investors supports the company's insurance business.

Al Safat TakafulAl Safat TakafulAl Safat Takaful Insurance Company
Al Safat Takaful
Kuwait | Financial Services
News | Profile | Officers
is aiming to improve its market position in the Kuwaiti market which is becoming increasingly competitive with the presence and entrance of takaful insurers. The company's started underwriting in 2005 and by the end of FY2007, the company's Gross Premiums Written (GPW) has increased to KWD 3.09 mn. In FY2008, the GPW increased to KWD 3.86 mn registering 19% YoY growth. As of 2008, the takaful market in Kuwait represents only 16.7% of the overall insurance industry and this percentage continues to increase along with an increase in new Takaful Insurance companies joining the market. This indicates an increasing competition in the Takaful market. In FY2009, the GPW witnessed a 31.4% decline which was mainly due to a significant decline (91.2%) in Marine & Aviation premiums.

Al Safat's underwriting quality measured by the loss ratio has not changed significantly over the last 3 years. The majority of the claims have been incurred by the motor vehicle segment, whichis in line with the insurance industry norms. The expense ratio significantly improved in 2009 mainly driven by the increase in Net Premiums. We expect any improvement in the expense ratio in the near future would largely be driven by the increase in premium written.

For Takaul companies, shareholders' account's revenue is solely driven by investment income. Such heavy reliance on investment income is not sustainable during economic downturns, as investment income tends to be highly volatile. However, relying on investment income on the shareholders' accounts is common in the takaful industry due to the fact that the sole purpose of the shareholders' account is to support policyholders and to protect the value of shareholders.

The principal methodology used in rating Al Safat TakafulAl Safat TakafulAl Safat Takaful Insurance Company
Al Safat Takaful
Kuwait | Financial Services
News | Profile | Officers
Company is "Insurance Methodology", and it can be found at www.capstandards.com in the 'methodologies brief' sub-directory under the Rating tab.

In a continuous effort to benefit both local and regional issuers, CSR has developed rating scales that reflect issuers' scale and focus, whether global or regional. CSR developed a National Rating Scale along with its International Rating Scale to give maximum benefit for issuers when dealing with stakeholders (banks, investors, regulatory bodies, etc.). Small and regional issuers with only local and regional operations might be interested in knowing their creditworthiness when compared to their local peers only. While larger, internationally focused issuers would be more interested in knowing their position compared to global players. In all CSR's Ratings, an International Rating is assigned along with an equivalent National Rating.

Is Egypt going takaful?

2010-12-31T12:52:00.005+05:00

Islamic insurance has been steadily growing as a "Halal" alternative for commercial insurance that some believe to be illegal and risky

"If you want to invest in Halal items, with fair interest. If you want to insure your home without opposing God, come and let’s all cooperate and invest in Halal."

So reads a statement on the facebook group page of Saudi Egyptian Insurance House, one of Egypt’s takaful insurance companies, in Latin letters.

Takaful, literally "joint guarantee", is to invest the halal (permitted in Islam) way.

Recent as it is in the Egyptian liberal market, the Islamic laws-compliant version of insurance seems to be slowly but surely growing.

"Facebook is one of our innovative ways to marketing," says Gamal Shehata, the company’s branches and production general manager, from his office in the company's five floor silver building in the Cairo suburb of Dokki.

Egypt has had a bad experience with Islamic finance.

Back in the mid 1980s, Islamic fund management tycoons like Rayan and Al-Saad were accused by the government of investing millions of pounds of Egyptians' savings in a ponzi scheme. Any dividends paid to investors were from their own money or that of other investors rather than from any actual earned profit

Although the government confiscated their local assets, hundreds of millions of Egyptians lost their money.

"One way to attract customers and regain their trust is by combining state-of-the-art marketing tools with word-of-mouth traditional ways," says Shehata, surrounded by decorative Quranic frames, before being interrupted by an attractive veiled young lady, one of the company’s marketers, wearing modern jeans and high heeled boots.

"Our main target is that growing category of Egyptians who are wary of investment and other financial dealings because they think its haram (forbidden in Islam)," added Shehata.

Established back in 2003, with an authorized capital of LE100 million ($17,220,595), as the first Takaful insurance company in Egypt, the Egyptian Saudi House operates according to sharia (Islamic law) whereby the insured is a partner in the end of the year's surplus.

As a corporate insurance entity, the company provides insurance against all manner of risks.

The company’s total assets have grown from LE79.6 million ($13.7 million) in 2007-2008 to LE95.9 million ($16.5 million) in 2008-2009.

The company has been followed into the sector by eight others companies that all started operating in mid 2008, with fifty percent of the capital coming from the Gulf countries.

The new comers quickly prospered to claim, in 2009, a 5 percent stake of the LE8 billion ($1.45 billion) Egyptian insurance market, according to figures released by the Egyptian Financial Surveillance Authority (EFSA).

According to the World Business Institute's International Review of Business 2009 (Islamic Banking Theories, Practices and Insights), the first modern experiment with Islamic banking and financing took place in Egypt back in the 1963. Ahmad El Najjar, an Islamic economist, set up a savings bank based on profit-sharing in the Egyptian town of Mit Ghamr.

The bank proved to be popular and prosperous until it closed in 1967.

The bank, which neither charged nor paid interest, invested mostly by engaging in trade and industry, directly or in partnership with others, and shared the profits with their depositors.

In 1972, Mit Ghamr Savings was revived when it became part of Nasr Social Bank which is still in business in Egypt.

In modern times, takaful was revived in 1979 with new companies emerging first in Sudan and Saudi Arabia.

From the mid 1980s the idea spread to the Far East, before gaining momentum among other Arab countries in the last five years.

Abdul Raouf Qutb, chairman and managing director of the Union of Egyptian Insurance Company, told Ahram Online he expects the growth of the takaful insurance sector in Egypt to reach "between 15 and 20 percent by the end of 2013."

Such expectations, say insurance executives, are optimistic.

"I think one main reason for our quick jump in sales is that we have targeted that sector of Muslims who fear halal and haram investment," explains Shehata.

In a nutshell, takaful pools a community's resources with an investment manager or company. Contributors to the fund are then given financial support when they need it.

In essence, there are two kinds of investment tools: Equity-based and fixed income-based, explains Mahmoud Abdallah, chairman of Insurance Public Holding which holds 55 percent of the Egyptian insurance market.

Islamic companies invest only in the first kind of tools, which means sharing risks and variable premiums.

The idea, spiritual as it is, has proved a success worldwide, with cooperative insurance coming as a hostile yet parallel body to the illicit conventional insurance, in which companies deposit premiums in interest-bearing, but risky, investments.

Internationally, total takaful premiums topped $2 billion in 2006 and are estimated to reach US$7.4 billion by 2015, according to a 2008 study entitled ‘The Viability of Islamic Banking and Finance in a Capitalist Economy: A South African Case Study’ in the Journal of Muslim Minority Affairs.

"Clients view their contribution as a “donation” which is transferred to the ownership of the Takaful Waqf Fund and placed in interest-free sharia-approved investment projects including Faisal Islamic Bank, and Egyptian Saudi Finance Bank," adds Shehata.

Each takaful company has a governing body (Sharia Board) that consists of ulamaa (Islamic scholars) to judge if the company’s transactions are consistent with Islamic practice or not.

"Nasr Fareed Wassel (Egypt’s former Mufti) keeps the upper hand in our company when it comes to issues of halal and haram," elaborates Shehata.

But because business is business, the company didn’t miss the chance of taking on a big cigarette company last year, though the item is considered forbidden by Islam.

"The compromise we reached with the board is to sign a medical insurance contract, while avoiding insurance on the company’s assets that are considered haram."

For Islamic life insurance companies, the issue of halal and haram is a constant one, to the point of whether it is even consistent with the fatalistic religion to insure your life.

"We're not preachers, we're doing business," says Saleh Eid, CEO of Egyptians for Takaful Life Insurance Company. "We don’t care who says this is improper as we have our sharia board that says what's ok and what's not."

The company has seen its revenue surge to LE12 million in 2009, from LE1.8 million the previous year.

By the end of 2008, Islamic finance gained a new reputation for stability with the credit crunch and subsequent global recession seeing many lose faith in the capitalist system and its vulnerable financial institutions.

"I think the 2008 financial crisis has caused clients shift from investing in commercial banks and institutions to Islamic companies," adds Shehata. "We have customers who don’t give much attention to issues of halal and haram. We also have Christian clients."

In Islamic finance, derivatives, hedge funds, short-selling and speculation are illicit, haram.

Furthermore, the risk-sharing concept of murabaha, where entrepreneurs are granted capital and share the profits with the bank, brings Islamic companies closer in step with the real economy.

Advocates say that Islamic banks are untouched by the current crisis due to the nature of Islamic banking, especially its avoidance of the debt trading and market speculation that takes place in European and American banks, according to the Saudi Al-Sharq Al-Awsat daily.

The less risky and more stable practices of takaful companies might go some way to changing Egyptians' suspicion of religious institutions.

At the moment, however, there are twice as many traditional insurance companies, with far larger investments and assets.

ourtesy by:Ahram Online

Distance Learning Programs on Islamic Banking and Takaful

2010-12-29T19:37:00.003+05:00

Tunisia / Islamic Finance: Zitouna Takaful is born

2010-12-29T11:30:00.003+05:00

Zitouna Takaful is born. It is a limited company whose future subscribed capital is 15,000,000 dinars.

The company's purpose in Tunisia and abroad is to operate in accordance with the principles and values that it has adopted and for which it was established, particularly those relating to Takaful and Re-Takaful:

Among its activities, the execution and management of contracts or agreements for insurance and reinsurance of any kind and any other transactions or agreements that may be legally made by insurance companies except for life insurance and reinsurance.
More generally, its vocation is to carry out or participate in any industrial, commercial, financial, agricultural, or real estate operations, related directly or indirectly to any objects defined above.

Courtesy by:Zitouna bank

Malaysia's Great Eastern Takaful plans regional growth

2010-12-28T15:36:00.007+05:00

KUALA LUMPUR | Mon Dec 20, 2010 3:09am EST

KUALA LUMPUR Dec 20 (Reuters) - Malaysian Islamic insurer Great Eastern Takaful will expand to Indonesia and Brunei to tap the Muslim market for sharia-compliant products, its chief executive officer said on Monday.

The company, which is owned by a subsidiary of Singapore's Great Eastern Holdings Limited and Malaysia's armed forces cooperative, also has Singapore and China on its radar for expansion.

It plans to go to Indonesia in 2011 and Singapore and China in 2014 or 2015.

"Both (Indonesia and Brunei) are majority Muslim population and this sharia-compliant insurance will definitely attract the population," Great Eastern Takaful chief executive Mohamad Salihuddin Ahmad told reporters.

"Beyond that we are also looking into Singapore and China because these are the two countries where Great Eastern has a presence."

Indonesia is regarded as the next Asian growth market for Islamic finance. Its Islamic bank assets were 66 trillion rupiah as of December 2009, compared with 2,534 trillion rupiah for the banking industry as a whole, central bank figures show.

In Malaysia, Islamic banking assets totalled about $95 billion, or 19.6 percent of the total, as of December 2009, the central bank has estimated.

(Reporting by Liau Y-Sing, Editing by Saumyadeb Chakrabarty)

Courtesy by:Reuters

Takaful International in medical services deal

2010-12-27T13:46:00.003+05:00

MANAMA: Takaful International Company has signed a mutual co-operation agreement with Anadolu Medical Centre in Turkey to provide a wide range of medical services for its customers.

Anadolu Medical Centre has a specialised medical team in all disciplines including oncology, cardiac care, women's health and IVF, neurological sciences, surgical sciences and orthopedics.

It is also considered among the top hospitals in the world that uses the 'cyberknife radiosurgery' technology in the field of oncology, which is currently one of the most secured ways to treat tumours without any surgical intervention.

It is designed to destroy tumours with minimal damage to the tissues surrounding it.

"Signing this agreement enhances Takaful services, especially coverage of health insurance," Takaful International chief executive Younis Jamal Al Sayed said.

"We are pleased with this co-operation with such a large medical centre that works in strategic partnership with John Hopkins Medicine, which is consistently ranked amongst the best hospitals in the US.

"The agreement includes many features such as assistance in travel and transportation, as once a person has decided to be treated at Anadolu Centre, Takaful International will make arrangements for the travel, hotel reservation and other trip requirements deemed necessary," he said.

"Moreover, the agreement entitles all Takaful International customers and non-customers to have access to all medical services," he added.

In addition, Takaful International will provide all its customers and non-customers the Remote Second Medical Opinion service with specialised doctors in their fields, to ensure diagnosis accuracy and the treatment to be received by the patient.

It is now possible for the executive managers to have a full medical examination at special comprehensive rates, which include the cost of medical examinations and travel tickets, accommodation and transportation.

"The company continues to develop its insurance products and health insurance in particular, due to the growing demand and increased importance of health awareness, as the company seeks to attract more major medical hospitals regionally and globally," Mr Al Sayed added.

"We are delighted to sign this agreement with Takaful International, which is one of the leading insurance companies that provides innovative products, safe and special services in addition to its association with the major international re-insurance companies," Anadolu Medical Centre chief executive Hasan Kus said.

He also added that Anadolu Medical Centre offers wide range of high quality products and services that meet the international standards. The agreement was signed in Turkey at the Anadolu Medical Centre Hospital by Mr Al Sayed and Mr Kus.

Courtesy by: Gulf Daily News

Microfinance Gateway>New Islamic Microfinance Products to be Developed in Pakistan

2010-12-13T01:29:00.000+05:00

Microfinance Gateway>New Islamic Microfinance Products to be Developed in Pakistan

Top Islamic Finance Scholars Oppose Reform

2010-12-09T23:31:00.001+05:00

Two of the Gulf's top Islamic finance scholars spoke out against efforts to reduce the number of boards they and their peers are allowed to sit on, challenging industry attempts to improve corporate governance.

Bankers in the emerging $1 trillion Islamic finance industry say the concentration of hundreds of board positions in the hands of a few sharia scholars leads to conflicts of interest and hampers appropriate supervision.

Bahrain based industry body AAOIFI is drafting rules to regulate scholars' shareholdings and the number of Shariah supervisory boards a single scholar can sit on. "There is no need to limit the number of boards," Sheikh Nizam Yaquby, one of the most revered Islamic finance scholars in the Gulf Arab region, told a conference in Manama. He sits on several dozen sharia supervisory boards.

He said there was no similar criticism of other groups such as lawyers or accounting firms working for several banks: "Why should (sharia scholars) not be treated like other professionals in the field?"

Only the Malaysian central bank limits the number of boards scholars can sit on, while the United Arab Emirates this year introduced caps in the insurance sector.A second top scholar in the Gulf, Mohamed Al Qari, also dismissed efforts to limit the number of board seats that scholars are able to hold.

"I don't think it will be very helpful if we restrict the membership of sharia boards to only one, if the member himself is not qualified," he told the conference.He said that simply graduating from an academic sharia program alone was not sufficient to be qualified to sit on a bank's sharia supervisory board and that junior scholars needed to learn from senior colleagues until formal training programs are established.

He said: "This knowledge that has been accumulated by a small number of people can go from the first to
the second generation through apprenticeship."

Both Yaquby and Al Qari are members of the AAOIFI sharia board that develops accounting and auditing standards for Islamic banks.

Bankers say reforms launched by AAOIFI will likely fall short of expectations as scholars governing themselves are unlikely to cut into their own source of income, unless central banks force them to do so.

"This has to come from a body that can regulate, that can impose the rules," Muddassir Siddiqui, an Islamic finance scholar and partner at law firm SNR Denton.

He said that the industry needed to strike the right balance between improving transparency and ensuring scholars develop the know how needed in Shariah supervision.

Non-Muslim demand seen boosting family takaful-FWU

2010-12-04T20:37:00.001+05:00

The family takaful industry will grow five folds to account for about a 10th of the overall life insurance sector within the next decade, as Islamic insurance attracts more non-Muslim demand, sharia insurer FWU said on Tuesday.
Family takaful now has a market share of about 2.5 percent of the overall life insurance industry, and this was expected to rise to as high as 10 percent over the next 10 years.
"The Muslim population is more than a billion now but I don't think that this is really the market," Manfred Dirrheimer, managing director of FWU Global Takaful Dubai, said on the sidelines of a conference in the Malaysian capital.
"There is a trend for these products but equally shared between Muslims and non-Muslims."
Dirrheimer said the target was reachable although some bankers have been less optimistic about the industry, citing the shortage of sharia-compliant instruments that insurers can invest in and doubts about whether takaful really complies with the sharia's guidelines.
Takaful premiums are expected to grow to around $8.8 billion globally by the end of 2010, compared with $3.4 billion in 2007, according to Ernst & Young.
Islamic insurance has struggled to take off in some Muslim countries. It has a penetration rate of 10.5 percent compared with 42.3 percent for conventional insurance in Malaysia, which has the world's largest Islamic bond market.

FITCH affirms HSBC Amanah Takaful's IFS at A-

2010-12-04T20:31:00.002+05:00

Fitch Ratings has today affirmed the Insurer Financial Strength (IFS) Rating of Malaysia-based HSBC Amanah Takaful (Malaysia) Sdn Bhd (HSBCAT) at 'A-'. The Outlook is Stable.

HSBCAT is considered an important member of HSBC Group under Fitch's "Approach to Rating Insurance Groups", and its rating is underpinned by the group's ability and willingness to provide on-going support. The rating agency recognizes the support and benefits HSBCAT enjoys from the group's strong branding, product and distribution capabilities, and other management resources. The rating also incorporates HSBCAT's conservative investment mix, healthy capitalisation, and prudent management. On the other hand, it is constrained by the takaful operator's limited track record, modest size, amidst intensive market competition. Additionally, the company is challenged to manage its expenses appropriately as it builds up its business portfolio.

Since its inception, HSBCAT's asset allocation has been conservative. At the fund and operator level, investments reside mostly in fixed income instruments, as well as cash and fixed deposits. Fitch views the investment strategy, which places principal protection before return maximisation, as prudent. However, the agency notes that HSBCAT is somewhat constrained by the limited depth and breadth of Malaysia's Islamic bond market. Although HSBCAT's current capital level is healthy, the agency cautions that it is important for the operator to maintain its capital level commensurate with its portfolio, as it grows its business

HSBCAT follows a modified Wakala (agency) model, whereby the takaful operator receives a Wakala fee for the management services it provides to the participants, as well as an incentive fee, expressed as a percentage of surplus from the risk funds. Under this model, HSBCAT's profitability is determined, to a large extent, by its Wakala fee income and expense level. In Fitch's opinion, the execution risks inherent in HSBCAT's business plan are mitigated by the group's management support.

The key rating driver that could result in a one-notch upgrade for HSBCAT would be improvement in the credit profile of the HSBC Group, as reflected by an upgrade of HSBC Holdings Plc ('AA'/Stable) and/or the group's core operating entities such as the Hongkong and Shanghai Banking Corporation ('AA'/Stable). Conversely, should the credit profile of HSBC Group deteriorate, this could put downward pressure on HSBCAT's rating. Additionally, an unexpected significant deterioration in the standalone credit profile of HSBCAT in terms of market franchise, premium sustainability, operating performance and capital level relative to its business profile, could also affect its rating. HSBCAT's rating is assigned with less than five years of audited information available.

HSBCAT was incorporated in 2006 as a composite takaful operator. At present, the company is 49%-owned by HSBC Insurance (Asia-Pacific) Holdings Ltd, 31% by Jerneh Asia Bhd and 20% by the Employees Provident Fund Board. HSBCAT's key products include retirement protection, homeowner takaful, mortgage life and investment-linked plans

Courtesy by : Reuter

PQFTL and NAFA Funds Sign Agreement

2010-11-23T21:04:00.001+05:00

Pak-Qatar Family Takaful Limited (PQFTL) and NBP Fullerton Asset Management Ltd. (formerly National Fullerton Asset Management Ltd.) signed an agreement for Family (Life) Takaful coverage to the investors of NAFA Riba-free Savings Plans.

MoU was signed by P. Ahmed , Director and CEO PQFTL and Dr. Amjad Waheed, CEO, NAFA Funds.

According to the agreement and subject to the terms of the Group Family Takaful Scheme issued by PQFTL, NAFA Riba-free Savings Plan’s investors will be provided free Family (life) Takaful coverage equal to the amount of investment and subject to a maximum of PKR 2,000,000 per covered person.

Takaful is a Halal risk mitigation tool which serves as an alternative to conventional insurance."

Takaful signs key deal with Generali

2010-11-10T22:31:00.002+05:00

MANAMA: Generali International has selected Takaful International as their representative in Bahrain after the signing of an exclusive co-operation agreement between them which covers all health insurance for the clientele of Generali in the kingdom.

Under the agreement, all clients and customers of Generali International in Bahrain will benefit from the services offered by Takaful International in health insurance and in turn Takaful family plans to utilise the services of Generali in the field of insurance and reinsurance, in laying the foundation for a successful global partnership in the field of Takaful insurance.

"We are pleased to work together with Generali International through the provision of effective insurance coverage in line with the requirements of all institutions to ensure success and keep pace with the rapid growth in changing times," said Takaful International chief executive officer Younis Alsayed.

"Generali's decision to select us a partner is a testament to our reputation and capability to be distinctive in the local Bahraini market and on the international platform.

"The company continues to develop all health insurance products especially given the growing demand and increasing awareness of its importance, as the company seeks to create more partnerships in the Middle East," he said.

Generali International holds a Rating (AA-) from Standard & Poor's and is one of the largest global insurance companies with branches in more than 68 countries.

PQFTL Board Decides to issue 33% right shares!

2010-11-10T22:25:00.001+05:00

The Board of Directors of Pak-Qatar Family Takaful has decided to further invest in the company by issuing right shares upto 33% of the base capital. This was decided in the Board of Directors meeting of Pak-Qatar Family Takaful held in Doha recently.

The meeting was chaired by H.E. Shaikh Ali bin Abdullah Al-Thani chairman board of director and was also attend by all the members.

CEO, PQFTL Mr. P. Ahmed apprised the Board on the state-of-affairs of the Company and presented the progress report; Shaikh Thani and other members of the board expressed their satisfaction and appreciated the performance so far despite the difficult socio-economic conditions of the country.

Shaikh Ali bin Abdullah Al-Thani assured his full support to PQFTL. He said that PQFTL "has the institutional capacity to cater to the protection and long-term investment needs of the people of Pakistan." The sponsors of Pak-Qatar, who are leading financial institutions from the state of Qatar including QNB, Masraf Al-Rayan, QIIB, QIB, QIIC, The Amwal group and German base FWU group, showed their long term commitment to the country and pledged to provide assistance to support the cause of Takaful in Pakistan.

Pak-Qatar Family Takaful Limited, the pioneers of family Takaful (Islamic life insurance) in Pakistan, started its operations in October 2007 and achieved rapid growth in a span of 3 years.

Sharia-compliant insurance firm launched in Kenya

2010-11-10T22:12:00.001+05:00

The first Sharia-compliant insurance company in Kenya has been formed as the race for Islamic cash intensifies.
The firm, which will operate as Gulf Takaful Company Ltd, is being fronted by GulfCap Investments — the principal shareholder in Gulf African Bank.
Under the model, people seeking insurance cover will pay premiums to a collective fund from which payments will be made to members who suffer from the risks covered.
“People will find it a prudent model. Normally, when one insures their house or car, they don’t get their money back. We are offering a possibility to the insured to get back some of their money,” said Mr Suleiman Shahbal, the chairman of GulfCap Investments.
The bank’s chief executive, Mr Najmul Hassan, said introduction of the insurance company is a significant step towards offering and exploiting Islamic financial services.

Five new firms set to join UAE takaful market

2010-11-10T22:04:00.002+05:00

About five new companies offering Islamic insurance, or takaful, are expected to launch in the UAE by mid 2011, boosting competition, industry executives said last week of October, 2010.
"At least four to five companies have applied for licences and they could launch initial public offerings (IPOs)," Ezzeldin Elmassry, chief operating officer of Abu Dhabi National Islamic Finance (ADNIF), told a round table.
"There is fierce competition between takaful and conventional insurance companies," he said, adding that there are 54 insurance firms in the UAE.
ADNIF, the Islamic finance unit of National Bank of Abu Dhabi, plans to launch a takaful company in the first quarter of 2011 in a joint venture with three Abu Dhabi government backed firms.
Insurance penetration rates in the Middle East are among the lowest in the world at about 1 percent of per capita expenditure compared to 9 or 10 percent in Western countries, said Osama Abdeen, CEO of Abu Dhabi National Takaful Company.
The new takaful firms are mostly backed by strong existing entities, said ADNIF's Elmassry.
An official of the UAE regulator Securities & Commodities Authority said several applications for insurance licences are pending and some would be approved shortly, declining to provide any names.

Takaful IKHLAS Launches Group Scheme For Immigration Staff

2009-08-22T12:39:00.004+06:00

Takaful Ikhlas Sdn Bhd has launched a comprehensive group Takaful scheme for the staff of Immigration Department through the latter's Kesatuan Perkhidmatan Imigresen Semenanjung Malaysia (KPISM).Executive Vice President and Chief Operating Officer of Takaful Ikhlas, Wan Mohd Fadzlullah Wan Abdullah said the group scheme has been prepared specially to provide Syariah based comprehensive financial protection."The scheme will provide attractive and reasonable rates into the investment accounts of the participants. Besides the element of saving for retirement days, it is also created to minimise the risk factor," he said in a statement here Friday.Wan Mohd Fadzlullah said Takaful Ikhlas aimed to get 2,000 new members under the scheme with an estimated contribution amount of RM1 million in the first year.The scheme will be also opened to the family members of those taking up the scheme.Among the features of the scheme will include coverage for accidents, death, hospitalisation benefits, as well as coverage for 40 critical illnesses.Further details on the scheme can be obtained at KPISM or from any Takaful Ikhlas office.

--BERNAMA

Insurers can end sukuk compliance woes, experts say

2009-08-17T14:26:00.002+06:00

Islamic insurers can help rid the Islamic bonds market of crippling concerns over the compliance of structures with Islamic law, or sharia, industry experts and executives said.

Global issuance of sukuk fell 56 percent year-on-year to $14.9 billion in 2008, according to Standard & Poor's, as the market was caught up in the global liquidity freeze but also due to a debate on whether the majority of Islamic bonds, or sukuk, were sharia-compliant.

Prominent scholar Sheikh Muhammad Tariq Usmani said in late 2007 that most Islamic bonds were not compliant with sharia as their guarantee to pay out bondholders at maturity contradicts the principle of sharing risk and returns.

Peter Hodgins, a lawyer specialising in Islamic insurance at law firm Clyde & Co said Islamic insurance, or takaful, products could help reconcile the need for sukuk to comply with these requirements and investors' need to insure against risks.

"Takaful can be a solution to help out the sukuk market."

Takaful firms could provide insurance for sukuk investors that takes over notional annual payments to bondholders if they fall below an agreed amount, he said, adding that there were discussions in the industry on such a product.

In Islamic insurance, customers contribute to a pool of funds which is used to indemnify participants who suffer a loss, while in conventional insurance the insurer takes on the risk for a premium.

"As the sukuk market evolves, there could be room for such a product," said Nick Frei, chief executive of Bahrain-based Islamic insurer t'azur.

But he said pricing these products could be a challenge for takaful companies as the risk of sukuk was difficult to assess.

-- Reuters

Insurance deal signed for Eskan Bank staff

2009-08-17T14:02:00.002+06:00

Takaful International has signed a contract with Eskan Bank to provide health insurance for the bank's employees and their families for one year.

The contract has been awarded through the Tender Board, which is recognised for its highly-transparent policy in managing tenders.

"Eskan Bank's management is pleased that Takaful International has met all the terms and conditions of the tender," said bank general manager Sabah K Almoayyed

"This agreement is a confirmation of the bank's dedication to care for our professional staff, who are an essential element for the success of any financial institutions, as we are always keen to provide convenience and safety for them."

She said this insurance coverage is an important and a necessary incentive to the bank's staff to improve their morale and overall job satisfaction.

"We are glad to co-operate with Eskan Bank, through providing a comprehensive health insurance coverage for their employees and their families, with no doubt this coverage provides security, comfort and reassurance," said Takaful International chief executive officer Younis Jamal Al Sayed.

"Such coverages are considered an urgent requirement for all institutions to ensure their success and to keep pace with growth in light of the changes in the professional sector."

Mr Al Sayed added that the company continues to develop its insurance services, products and health insurance policies.

It seeks to attract more hospitals and clinics in the Middle East and include them within the network of their own health care providers.

-- Gulf Daily News

SABB Takaful rights issue starts

2009-08-17T13:20:00.003+06:00

SABB Takaful announces its rights issue started Saturday, 15 August 2009.
A number of 24m new shares are offered through this rights issue representing a 240% increase in SABB Takaful's shares to 34m. Shares are being offered at SR12.5 per share. The rights issue offering period will continue for ten working days including Wednesday 26 August 2009.

Dr Yazid AbdulRahman Al Ohaly, Chairman of SABB Takaful said:

'This is the first rights issue held in the Kingdom for an insurance company and the proceeds will be used to finance the future plans of the company. We are pleased to announce the start of the subscription period.'

Shareholders voted at the Extraordinary General Meeting, held at The Saudi British Bank headquarters in Riyadh on 8 August 2009 to increase the company's capital through a rights issue.

The offering is open to all SABB Takaful registered shareholders as of the close of trading on 8 August 2009. 12 shares is allocated for every 5 shares held by shareholders on the eligibility date.

During the offering period, eligible shareholders may submit their applications to subscribe for rights issue shares either through a branch of the receiving banks or tele-banking services section or automated teller machines (ATMs) or the internet banking service of any of the receiving banks providing such services.

Receiving banks for the rights issue are The Saudi British Bank (SABB), Al Rajhi Bank, The National Commercial Bank (NCB or otherwise known as Al Ahli Bank), Bank Al Jazira, and Samba Bank.

--AMEInfo

Takaful Ikhlas Appoints Two New Syariah Committee Members

2009-08-05T17:33:00.002+06:00

Takaful Ikhlas Sdn Bhd has appointed Associate Professor Dr Shamsiah Mohamad and Dr Muhammad Naim Omar as the company syariah committee members, effective April 1, 2009.

In a statement here today, the company said Shamsiah is currently serving as at the 'Fiqh' and 'Usul' Islamic Academic Studies Department of University Malaya while Muhammad Naim is an Assistant Professor of law studies at the International Islamic University (IIU).

The Takaful Ikhlas Syariah Committee's role is to assist the board and top management to provide counsel and guidance in ensuring the company operates and manages its business in accordance with Syariah principles.

--BERNAMA

Methaq Takaful changes board of directors

2009-08-05T17:30:00.003+06:00

Ali bin Za’al Al Mansouri replaced Dr Abdul Latif Al Shamsi as the chairman of Methaq Takaful Insurance Company, after the latter resigned recently.

Samer Mohammed Kanan was also elected as the managing director, and he will manage the company’s administrative staff.

“The change in the board of directors aims at developing the company and supporting its continuous progress and expansion plans,” said Samer Kanan.

Methaq Takaful Insurance Company is a registered and licensed General Takaful company in the UAE, with a capital of Dh150 million ($40.8 million).

The company offers individuals and corporations a complete range of high quality, flexible, integrated, Shariah-compliant insurance products and services.

Established on March 11, 2008, Methaq Takaful Company was listed on Abu Dhabi Securities Exchange on May 11, 2008 and its activities are clearly segregated between Takaful Fund, which belongs to its policyholders, and Methaq Takaful Operation, which belongs to the shareholders and from which all claims are reimbursed.

--TradeArabia News Service

Islamic business insurance from Salaam Halal

2009-07-29T10:51:00.003+06:00

Muslim CEOs running UK-based companies will soon be able to opt for takaful risk management solutions from stand-alone Islamic insurer, Salaam Halal.

According to a report by Reuters, the move represents a branching out by Salaam Halal, which has so far focused on providing takaful motor and home insurance.

Takaful, a form of insurance legal under Islamic law, adheres to strict guidelines on investments.

Insurance funds cannot be invested in alcohol or gambling and there is clear segregation between assets owned by members and those owned by the insurer.

The new business will target Muslim-owned small and medium sized businesses with less than £1m annual turnover, including lawyers, doctors, retailers, and accountants.

“It was always our intention to look at these markets,” said Salaam Halal CEO Bradley Brandon-Cross.

“We will be very much focusing on this project in 2010,” he added.

There are an estimated 140,000 Muslim-owned SMEs in the UK.

--Insurance Daily

IGI Investment Bank, Pak-Qatar sign MoU

2009-07-29T10:41:00.003+06:00

IGI Investment Bank, a part of the IGI Financial Services, recently signed a bancatakaful agreement with Pak-Qatar Family Takaful aiming to further strengthen its portfolio by adding Family (Life) Takaful Insurance to its insurance advisory services. Under this agreement, clients will be able to secure their own and their family’s future the Islamic way through a host of Shariah compliant Takafu—Islamic insurance—products offered to the bank. IGI Investment Bank will, therefore, be able to cater to all those clients who are seeking a Halal alternative to conventional insurance

--Daily Times

UK's only Islamic insurer targets entrepreneurs

2009-07-29T10:38:00.001+06:00

* Eyes Muslim-owned SMEs with less than 1 mln stg turnover

* Mulls life insurance partnership, Europe expansion

LONDON, July 24 (Reuters) - Salaam Halal, the UK's only stand-alone Islamic insurer, will expand next year to offer insurance -- or takaful -- to companies run by Muslim businesses, the company's CEO said on Friday.

Bradley Brandon-Cross told Reuters the company, which launched in 2008, wants to launch the first takaful product range for Muslim-owned small and medium-sized business in Britain, which he estimated number around 140,000.

Major European insurers have been considering a move into the European takaful market, seeking to tap demand from the millions of Muslims on the continent [ID:nLE729394], but the market is still in its infancy and growth is hard to predict.

Salaam Halal -- which has so far focused on car and home insurance -- will particularly target businessmen with less than 1 million pounds ($1.65 million) annual turnover, typically lawyers, accountants, doctors and retailers.

"It was always our intention to look at these markets. We will be very much focusing on this project in 2010," Brandon-Cross said.

Takaful works like mutual-insurance but there is a clear segregation of the assets owned by members and those owned by the insurer. Members contribute to a common pool to fund claims and members benefit if the pool is left in surplus.

Investments made using the pool of funds adhere to sharia law and shun sectors such as alcohol and gambling.

Ernst & Young has estimated the global takaful contributions will reach $7.7 billion in 2012, double the volume in 2007, at the conservative end of estimates.

Salaam Halal is considering offering life savings products in partnership with other insurers in the UK and outside the UK, which Brandon-Cross declined to name. The company may also move into European countries with large Muslim populations, such as France, Germany and the Netherlands.

--Thomson Reuters

Takaful Ikhlas Appoints Two New Syariah Committee Members

2009-07-29T10:31:00.007+06:00

Takaful Malaysia confident of outperforming sector's growth target

2009-07-18T12:38:00.003+06:00

SYARIKAT Takaful Malaysia Bhd (STMB), the pioneer Islamic insurer in Malaysia, expects to outperform the industry's 25 per cent growth target for 2009, says group managing director Datuk Hassan Kamil.

Recovery in the general and family insurance portfolio and improved equity market in the past four months has improved the company's outlook, he said.

STMB has added professional financial advisers to its distribution channels and hopes to expand its customer base to include the middle-upper Malaysian market.

"We want to elevate the company to the next level, targeting more cash from the demand of customers in this income bracket (with higher contributions or premium size)," Hassan said, after the signing ceremony between STMB and Standard Financial Planner (SFP) in Kuala Lumpur yesterday SFP will market STMB's products through its network of more than 300 representatives, who include Bank Negara Malaysia-licensed financial advisers.

The tie-up would improve the company's bottom line by 10 per cent, he added.

For the third quarter ended March 31 2009, the insurer posted a pre-tax loss of RM11.46 million down from a pre-tax profit of RM11.07 million in the same quarter last year.

Revenue also declined to RM187.67 million from RM280.67 million previously.

Hassan also said that STMB is on track to regain its number one position in the market in two years, when it secures more than 50 per cent of RM11 billion assets in the industry, from its current RM4 billion or 40 per cent.

--Business Times

STMB teams up with Standard Financial Planner

2009-07-18T12:27:00.003+06:00

Syarikat Takaful Malaysia Bhd (STMB) has entered into a distribution agreement with Standard Financial Planner Sdn Bhd (SFP) to enhance the penetration rate of STMB’s family and general products into the middle-upper Malaysian market.

The agreement signed yesterday makes STMB the first takaful player to add professional financial advisers to its existing portfolio of distribution channels.

SFP is to market STMB products through its nationwide network of more than 300 representatives, of whom 75 are licensed financial advisers.

STMB group managing director Datuk Mohamad Hassan Kamil said SFP’s financial advisers would play an instrumental role in reaching out to potential customers in the middle-upper income bracket.

“STMB will also work closely with the financial advisers to offer comprehensive insurance, investment and saving options to satisfy the holistic demand of these customers,” he said in a statement yesterday.

The engagement of SFP is part of STMB’s strategy to gain more customers with higher contributions or premium size.

SFP is the market leader and the largest independent financial advisory group in Malaysia.

--The Star online

Takaful Malaysia Eyes Over 50 Per Cent Mart Share

2009-07-17T16:43:00.005+06:00

Syarikat Takaful Malaysia Bhd aims to capture more than half of the takaful industry's total asset market share within the next two years amid the current economic slowdown.

Group managing director, Datuk Mohamad Hassan Kamil, said the industry's total assets amounted to between RM11 billion and RM12 billion while the company's share currently was RM4.05 billion.

"We will grow slightly above the current takaful market rate, which is between 20 and 25 percent per annum," he told a media briefing after signing an agreement with Standard Financial Planner Sdn Bhd (SFP) here Wednesday.

SFP, which was set up in 1999, is one of only ten licensed financial advisors in Malaysia.

It is a member of the Australian-based Professional Investment Group of Companies that operates across seven countries.

Hassan said under the agreement, SFP would market Takaful Malaysia's products through its nationwide network of more than 300 representatives, of which 75 percent were licensed financial advisors with Bank Negara Malaysia.

He said the addition of SFP to its existing portfolio of distribution channels would boost the company's revenue by 10 percent.

"This will enhance the penetration rate of our family and general products into the middle-upper Malaysian market as well as making them more accessible wider customer base.

"We will work closely with SFP's financial advisors to offer comprehensive insurance, investment and saving options to satisfy the holistic demand from customers," he said.

Takaful Malaysia posted a pre-tax loss of RM11.461 million for the third quarter ended March 31, 2009 compared to a pre-tax profit of RM11.07 million in the same quarter last year.

Revenue declined to RM187.667 million from RM280.678 million previously.

Hassan said Takaful Malaysia planned to undertake a rebranding exercise to reflect its fresh characteristics in conjunction with its 25th year anniversary in December.

-- BERNAMA

Etiqa bags Best Banca Takaful award

2009-07-17T16:37:00.003+06:00

ETIQA Takaful Bhd has won the Best Banca Takaful award at the International Takaful Award 2009 held in conjunction with the Third International Takaful Summit 2009 in London recently.

Etiqa Takaful was the only Malaysian takaful company to win in the global 17-category event, it said in a statement.

Etiqa Takaful was hailed for its performance despite the economic environment and innovative yet simple products in Banca Takaful.

“Etiqa Takaful’s growth in the banca takaful business does indeed exhibit its capabilities to provide appropriate financial solutions together with its Banca partners” said Mohamed Abdullah, director of the Middle East Business Forum.

--Business Times

Insurance Stands Tall

2009-07-17T16:27:00.002+06:00

These are testing times for any financial institution. But if there is a Middle Eastern industry relatively well-placed to weather the pressures of the international downturn, it may be insurance, writes Paul Melly...

Having been a relatively slow developer in the past - by comparison with the region's dynamic banking scene - the insurance business is probably less exposed to the pressures of the credit crunch. And in extending its reach among consumers, it may have room for expansion even at a time of cutbacks elsewhere in the economy. Indeed, the recent underlying trend has been strikingly vigorous.

In 2007, the industry grew by 27 per cent in the UAE and, before the credit crunch, analysts were suggesting that, across the region as a whole, future growth rates could be in the 18-20 per cent range before long. The Saudi insurance sector was already worth SR7 billion ($1.87 billion) and analysts suggested it could double or even triple in size within a relatively short timescale.

While the most bullish growth projections may have to be revised downwards, in light of global economic trends and the softening of the oil price in 2008, the overall pattern appears to be solidly established: the gradually extending reach of an industry that has yet to get to many of the potential personal or small business customers that the Middle Eastern market offers.

Moreover, it already has a solid base on which to build in key economies. In the UAE, for example, expatriates must now be able to show evidence of health insurance cover before they can secure a visa for work or even a visit. To cater for their needs, 30 different health underwriters are now active in Abu Dhabi alone.

Greater take-up
In Saudi Arabia, the authorities have been phasing in a mandatory requirement for the use of nine types of insurance, including employer liability, health and motor cover. That represents a major regulatory change for a country where only 10 per cent of cars used to be insured.

The Saudi industry used to be dominated by the parastatal National Company for Co-operative Insurance; competition was limited and was largely provided by foreign companies represented by agents. Tougher regulatory requirements for the use of insurance have been coupled with the liberalisation of the market, under a 2003 sector framework law, to allow room for a wider range of providers. Banks in the Kingdom have already started to respond by buying stakes in new local underwriters, while foreign players are now able to get directly involved, through joint ventures with local partners.

A significant feature of the reform is that it allows companies to offer both conventional insurance and the Islamic equivalent, 'takaful' - although they have to be able to account for both lines of business separately, so that auditors can clearly see that the Islamic services have been provided on the basis of sharia-compliant financing and security. But this is a small price to pay for insurers keen to move into what is a particularly dynamic segment of the industry across the Middle East. Because so many potential consumers are Muslims, takaful has huge scope for growth - emulating the expansion already enjoyed by Islamic banking.

By early 2008, the Saudi regulators had licensed a score of new takaful companies. In Egypt, the pioneering provider of takaful, Egyptian Saudi Insurance House, founded in 2002, saw its premium income quintuple
over the first five years of its operation.

Other investors - Egypt Kuwait Holding (EKH) in partnership with Tokio Marine & Nichido Fire Insurance, Bahrain's Ithmaar/Solidarity Group and a UAE consortium of Amlak, Arab Orient Insurance Company and Abu Dhabi Islamic Bank - are also moving into the Egyptian takaful business.

Fewer than 1 per cent of Egyptians use insurance at present. But the provision of sharia-compliant products is seen as a major tool for overcoming consumer resistance. "EKH sees great opportunities for profitable growth in Egypt, where insurance products have not yet reached the levels of acceptance that could be expected. The offering of the takaful scheme will remove one of the important barriers to the acceptance of insurance products by a large segment of the market," explained the chairman, Nasser al-Kharafi.

Growing volumes
The sheer size and untapped potential of the Saudi and Egyptian markets is a particularly strong attraction for investors seeking to develop new takaful activity, because they can hope to spread the costs of developing business models to comply with local requirements across a large volume of activity. But even in smaller markets, there are signs that takaful - and retakaful (Islamic reinsurance) - is on an upward trend.

February 2008 saw the launch of Al Fajer Retakaful, Kuwait's first such entity, but the third to be established in the Gulf, with Dubai Group holding a 51 per cent stake. With paid-up capital of $178.5 million, and building on Kuwait's strong base in Islamic finance, it aims to be the largest retakaful company in the world. "Given the clearly evident growth in the takaful industry, there are excellent opportunities ahead for a new, strongly capitalised retakaful company," explained Sameer al-Gharaballi, vice-chairman and managing director.

--Global Arab Network

Meezan Bank and Takaful Pakistan sign agreement

2009-07-08T13:34:00.003+06:00

Meezan Bank and Takaful Pakistan have entered into an agreement whereby all customers of Meezan Bank’s Labbaik (Hajj and Umrah) deposit product will be provided Shariah-compliant credit Takaful coverage.

President Meezan Bank Irfan Siddiqui and Takaful Pakistan CEO Capt Jamil Akhtar signed the agreement.

Under the agreement, all Labbaik installment customers that have performed Hajj or Umrah will be provided credit Takaful coverage at very special rates. In case of natural death, accidental death, permanent total disability or insolvency of a Labbaik customer his/her outstanding installments will be paid by Takaful Pakistan.

Speaking on the occasion, Siddiqui said that Meezan Bank had always focused on coming up with Riba-free products and innovative facilities for its customers and the arrangement with Takaful Pakistan was another step in the direction of making Islamic banking the banking of first choice. Jamil said that he was delighted to sign the Takaful agreement with the country’s leading Islamic bank.

--Daily Times

Takaful Malaysia Eyes Over 50 Per Cent Mart Share

2009-07-08T13:18:00.008+06:00

T'azur launches Takaful products

2009-07-08T11:51:00.004+06:00

T’azur Company, a regional Takaful firm based in Bahrain, today announced the launch of its extensive range of family and general Takaful products.

Addressing a press conference in Bahrain, Sheikh Dr Abdul Aziz Bin Naif Al Orayer, t'azur chairman, said: “The team has created an unparalleled range of Takaful products. Be it for your possessions, your family or your business - t’azur has a high quality and good value Takaful solution. t’azur is now open for business.”

Created by Unicorn Investment Bank, t’azur was established in November 2007 with an authorised capital of $500 million to capitalise on untapped opportunities and immense growth potential across the international insurance sector.

The company will initially offer 20 products – eight in Family Takaful and 12 in General Takaful categories.

T’azur’s products cover all aspects of people’s lives, possessions and well-being. The Family Takaful range of products includes advanced savings plans combined with life insurance, enabling families to plan for their future regardless of unforeseen circumstances.

The General Takaful products address not only the insurance needs of individuals (e.g., motor or home insurance), but also the needs of the business community of Bahrain, through its broad range of Shari’a compliant corporate products.

Sheikh Dr Abdul Aziz said the company has been late to enter the market and hence was able to avoid some of the repercussions of the financial crisis. “We have been able to learn from the mistakes of others,” he said.

The region is a fast growing and dynamic insurance market and we are entering it at the right time with the right products, he said.

“We are a regional company and plan to launch our products in Saudi Arabia, Kuwait and Qatar shortly.”

Nikolaus Frei, t’azur CEO, added: “Insurance in general and our Takaful products in particular, ultimately benefit the whole community.”

Bahrain is a largely untapped insurance market and provides a great opportunity for Takaful products. While the insurance market as a whole saw a 34 per cent growth in the kingdom last year, the Takaful market grew a massive 300 per cent growth, he said.

The challenge for Takaful firms is to create awareness and attract the vast majority of uninsured people to benefit from the products on offer, he said.

T’azur’s range of Family and General Takaful products are available either directly from t’azur, or through all leading insurance intermediaries in Bahrain.

--TradeArabia News Service

CreditWatch Negative - Kuwait-Based Wethaq Takaful Insurance Ratings Lowered

2009-07-08T11:37:00.004+06:00

Standard & Poor's Ratings Services said today that it has lowered its counterparty credit and insurer financial strength ratings on Wethaq Takaful Insurance Co. K.S.C. (Closed) to 'BB+' from 'BBB-'.

The ratings remain on CreditWatch with negative implications, where they were placed on May 27, 2009.

"The downgrade reflects our increasing concerns regarding the impact on Wethaq's financial strength of the situation at TID," said Standard & Poor's credit analyst Lotfi Elbarhdadi.

TID (The Investment Dar; not rated) has a 67% shareholding in Wethaq.

The negative CreditWatch status means that we may further lower the ratings, depending on the development of TID's financial situation. The ratings were originally placed on CreditWatch negative on May 27, 2009, following an announced default by TID on one of its sukuk issues.

Among the key features underlying our opinion on Wethaq's financial strength ratings, as a Takaful (Islamic insurance) player in Kuwait, was an implicit benefit of being part of a large Sharia-compliant shareholder.

We expect to resolve the CreditWatch status or update it within three months.

"The resolution timing will depend upon the outcome of TID's debt restructuring, and on obtaining more clarity on its financial situation and strategic positioning," said Mr. Elbarhdadi.

We will then focus on evaluating the impact of TID's ownership on Wethaq's financial flexibility (defined as its level of access to capital relative to its needs), competitive position, and investments. If the outcome of the review is negative, we may lower the ratings, but we expect the ratings to remain in the 'BB' category.

--Global Arab Network

Investors keep eye on corporate results

2009-07-04T13:43:00.002+06:00

Saudi shares were volatile last week as the financial sector was negatively affected by hardships facing certain Saudi family businesses, mainly Saad Group and Ahmad Hamad Al-Gosaibi & Brothers Co. (AHAB).

The Tadawul All-Share Index (TASI) shed 0.2 percent last week, closing at 5,599.38 points. TASI is currently 16.6 percent higher than the year’s start, according to the Riyadh-based Bakheet Investment Group’s (BIG) weekly report.

The report expected the Saudi exchange to respond to the quarterly results of listed firms, particularly banks and the Saudi Arabian Basic Industries Corp. (SABIC). SABIC shares dropped 5.30 percent last week to SR62.50.

Some insurance companies made solid gains last week. SABB Takaful shares jumped by 41.03 percent to SR110, Saudi Fransi Cooperative Insurance Co. by 30.04 percent to SR88.75, Alahli Takaful Co. by 24.32 percent to SR181.50 and Saudi Arabian Cooperative Insurance Co. by 12.99 percent to SR65.25.

The Saudi stock market turnover fell last week to nearly SR24 billion compared to SR30.9 billion in the previous week.

Shares in National Agriculture Marketing Co. plunged 13.64 percent to SR38 last week.

Uncertainty prevailed in most Arab stock markets last week as investors awaited the release of second quarter corporate results, which they believed would decide the course of regional markets in the coming stage, financial analysts said yesterday. “We think Arab markets will continue to be without direction in the coming few weeks as investors monitor the publication of balance sheets of listed firms to decide their positions for the coming stage,” an Amman-based portfolio manager said.

“I believe regional markets will also be affected by the movement of oil prices and the indicators released about the performance of the world’s recession-hit major economies that are supposed to provide clues for a way out of the current chaos,” he said.

The Amman Stock Exchange (ASE) was also the scene of violent fluctuations last week due to what analysts described as waves of speculation and varying levels of liquidity that played havoc with prices.

The all-share price index gained 0.95 percent last week, closing at 2,742 points, led by the mining sector and the Arab Bank, the ASE weekly report said.

Blue chip shares recovered in the last two days of the week after the Arab Bank management assured its shareholders that its financial position was unaffected by the hundreds of millions of dollars it had extended as long-term loans to two troubled Saudi business groups.

Kuwait’s KSE all-share index fell 0.4 percent closing week at 8,108 points, against speculation that Kuwaiti stocks were set to rebound after the Interior Minister Sheikh Jaber Khalid Al-Sabah survived a parliamentary no-confidence vote.

The performance of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi was mixed. Dubai’s all-share price index lost 2 percent last week closing at 1,821 points, while Abu Dhabi’s benchmark price gained 1.6 percent to close at 2,671 points.

The Dubai bourse was negatively affected by reports that UAE banks extended loans amounting to $3 billion to troubled Saad and Al-Gosaibi groups.

Egyptian shares behaved differently from other Arab stocks due to strong gains scored by blue chips, analysts said.

Egypt’s AGX30 index, measuring the performance of the market’s 30 most active stocks, climbed 8.9 percent last week closing at 5,965 points.

The GulfBase GCC Index increased slightly to 3,642.45 points last week. The value of GCC traded shares fell by 24.73 percent to $9.68 billion and volume declined by 17.13 percent to 6.15 billion of shares.

--arabnews

Standard & Poor's Voted Best Takaful Ratings Agency

2009-07-04T11:55:00.003+06:00

For the second consecutive year, Standard & Poor's Ratings Services today announced that it has been voted "Best Takaful Ratings Company" at the International Takaful Awards 2009. The accolade, presented during an awards ceremony at The 3rd International Takaful Summit 2009 in London, acknowledges our commitment to supporting the development of the Islamic insurance industry.

We published our first Takaful rating in 1997 and we remain the leading rating agency for Islamic insurers, with eight ratings on Takaful and Retakaful firms across Africa, the Middle East, and Asia--more than any other global agency. During 2008, we published updated guidance on our approach to rating Islamic insurers and assigned new ratings to Bahraini-based composite insurer Takaful International Co. BSC, Kuwait-based insurerWethaq Takaful Insurance Co. and Dubai-based Insurer Dubai Islamic Insurance & Reinsurance (Aman).

"We are thrilled to be recognized by the Islamic finance community for our continuing support of the Shariah-compliant risk-management industry, which is driving increased acceptance and understanding of the Takaful business model," said Yann Le Pallec, managing director of Standard & Poor's. "We continue to experience strong demand for new ratings from both Islamic and traditional insurers worldwide."

"Having grown from a niche product servicing limited demand, Islamic insurance has reached a critical mass in the past five years and is now firmly established within the global risk management markets," said Kevin Willis, credit analyst at Standard & Poor's. "The potential for growth is immense, with many consumers switching from conventional insurance or entering the Takaful market for the first time."

The International Takaful Awards 2009 are an initiative of the Middle East Business Forum and Afkar Consulting. Winners were selected from a pool of nominees by a panel of Shariah judges, lawyers, journalists, and practitioners from leading Islamic insurance firms worldwide.

--zawya

Takaful IKHLAS Helps Noridawati Buy Prosthetic Leg

2009-07-04T11:43:00.006+06:00

Takaful IKHLAS Sdn Bhd, provider of products and services in syariah-based financial protection, has contributed RM15,000 to help Noridawati Husin buy a prosthetic leg.

In a statement here Friday, its executive vice president/chief operating officer, Wan Mohd Fadzlullah Wan Abdullah, said the contribution was part of the company's corporate social responsibility.

"We hope that with this contribution, it will help change the life of Noridawati's family.

"The prosthetic leg will help ease Noridawati's burden who needs help in her movements as she has to take care of her children who are still small and to earn a living," he said.

Takaful IKHLAS, which started operations in July 2003, is a subsidiary of MNRB Holdings Bhd.

MNRB is listed on main board of Bursa Malaysia and its major shareholder is Permodalan Nasional Bhd.

-- BERNAMA

Allianz Takaful to launch Islamic pensions in 2010

2009-07-04T11:36:00.003+06:00

Allianz will launch its first Islamic annuity product next year, the head of its Takaful unit said, tapping into a growing number of clients in the Middle East keen to add to their state pensions.

It has long been hard for takaful -- or sharia-compliant -- insurers to sell such products, because of the lack of long-term Islamic bonds with which to match pension liabilities, Abdul Rahman Tolefat told Reuters on Wednesday.

The German insurer's unit had lobbied banks to issue long term debt and unnamed banks had now issued 25-year to 30-year sukuk, Tolefat said at a conference.

"This is really a promising industry, especially in the GCC (Gulf Cooperation Council) -- people are looking for private pensions because state pension are not high enough," he told Reuters on the sidelines of the conference.

Allianz was one of the first Western insurance companies to venture into takaful, in which members contribute to a pool of funds which is used to indemnify participants who suffer a loss, much in the same way as with a mutual insurer.

Allianz Takaful already has a pension product which pays out over a pre-agreed number of years, but annuities that guarantee income until death are still an untapped market.

Allianz Takaful is also lobbying for more access to short- to medium term debt and is asking the Bahraini Central Bank to earmark part of any sukuk issuance to takaful companies, who don't have the clout to compete with large banks.

Earlier this year, the Bahraini Government issued a $750 million sukuk and said last month it will issue a further $530 million of sukuk in local currency.

Takaful companies could still buy these sovereign sukuk on the secondary market but they tend to be too expensive, he told the conference delegates.

Among its projects, Allianz is also pursuing a partnership by the end of the third quarter with a network of distributors. Tolefat declined to say who they are.

--Reuters

Badr Al Islami announces first Takaful Savings & Investment Programme

2009-07-01T17:51:00.006+06:00

Badr Al Islami has announced the launch of Badr Takaful Savings & Investment Programme, the sharia'h compliant savings and protection scheme, available for the first time to Badr Al Islami and Mashreq.

The new scheme addresses the financial needs of customers looking for sharia'h compliant long term savings or investment plans, such as child education fees planning and retirement planning, with takaful benefits. Customers have the choice to build up their savings by either contributing on a regular basis or as a lumpsum amount, which then gets invested into some of the world's best performing Sharia'h compliant funds.

The programme also provides Takaful benefits, ensuring that savings and investments goals are achieved, even in the event of loss of life of the customer. Customers can choose to protect 60% or 100% of their intention. The product is completely Sharia'h compliant and is approved by the Shariah Board, headed by Sheikh Abdalla Ben Suliman Al-Manei, Chairman of the Shariah Board of Badr Al Islami.

Mubashar Khokhar, CEO of Badr Al Islami said: "Badr Takaful Savings & Investment Programme is an innovative product, bridging the gap of sharia'h compliant solutions in the bancassurance department's product offerings. With the established foundations of Mashreq and the specialized expertise of Badr Al Islami this new scheme allows us to reach out to even more customers who are looking for the most convenient way to save for their needs in future."

In line with other products and services offered through Mashreq and Badr Islami, the scheme is both convenient and affordable. Customers can begin by contributing with a minimal amount of AED 500 per month, and can be obtain policy documents over the counter at Mashreq branches.

--zawya

Dubai Bank signs strategic alliance with SALAMA for Takaful products

2009-07-01T17:48:00.002+06:00

Expanding its portfolio of Islamic insurance plans, Dubai Bank today announced it has entered into a strategic alliance with Islamic Arab Insurance Company (SALAMA), a leading provider of Sharia-compliant insurance solutions (Takaful).

Under the terms of the agreement, SALAMA will offer Dubai Bank customers a wide range of Sharia-compliant unit-linked funds through lumpsum investments as well as systematic investment plans.

In addition to the comprehensive protection benefits provided under the scheme, the plans will also assist the bank's customers to save for short and long-term needs such as education, retirement planning and others.

"Adding a host of Takaful plans from industry experts such as SALAMA will greatly support our customers in realising their personal goals for the long-term financial protection of their families," said Mohamed Amiri, Head of Retail Banking at Dubai Bank. "Offering a diverse range of consumer finance solutions, we seek to be an active partner, helping our customers meet their financial needs. Strategic partnerships with Sharia-compliant entities are central to our overall growth plans and value addition initiatives."

According to industry experts, the global Takaful industry has grown by 20 to 25 per cent per annum in recent years, with the Gulf consistently accounting for around a third of worldwide figures. By 2015, the global Takaful sector is expected to reach US$11 billion.

Noel D'Mello, General Manager, Family Takaful, SALAMA, said: "The current global economic conditions have heightened the need for families to plan prudently for wealth protection and accumulation. SALAMA has specialised in customising systematic investments and savings-linked Takaful plans which provide good value for money to the discerning investor. By partnering with the fast-growing Dubai Bank, we are able to provide the benefits of Sharia-compliant Takaful plans to a niche segment of the UAE population."

--arabianbusiness.com

A.M. Best to Attend 2009 International Takaful Summit

2009-06-26T15:16:00.004+06:00

A.M. Best Co. will attend the 2009 International Takaful Summit, to be held 30 June to 2 July at the Jumeirah Carlton Tower in London.

A.M. Best continues to expand its rating coverage of insurance and reinsurance companies throughout the Middle East, including Takaful. In its methodology on the rating of Takaful, A.M. Best discusses its interactive credit rating process as it pertains to insurance organizations compliant with Islamic beliefs.

Founded in 1899, A.M. Best Company is a global full-service credit rating organisation dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.

--Businesswire

Allianz hails changes in bank distribution

2009-06-26T13:55:00.002+06:00

Allianz Malaysia Bhd welcomes the recent deregulation of bank distribution of insurance products but expects some short-term squeeze in margins as the industry adjusts to the new rules.

Chief executive officer Alexander Ankel said the changes recently announced by Bank Negara, specifically with regards to bank distribution, “is something that we welcome because it allows us to broaden our bank distribution capabilities.”

“Other than that, we want to be a reliable insurer to our partners and customers providing products from A to Z,” he said after the company AGM yesterday.

In April, Bank Negara announced a liberalisation package for the financial sector.

Changes for the insurance industry included the issuance of new family takaful licences with higher limits of up to 70% on foreign equity participation in insurance companies and takaful operators, and incentives for the consolidation and rationalisation of the insurance industry.

They also included the removal of restrictions on the establishment of branches and bancassurance tie-ups, and greater flexibility to employ specialist expatriates.

Ankel said the bancassurance deregulation allowed insurance companies to work with more than one bank and simultaneously allowed banks to work with more than one insurance company.

Prior to the change in regulations, the insurer had already been expanding bancassurance as a new channel of distribution, he said, pointing to Allianz’s existing partnership in general insurance with the CIMB group and in life insurance with Alliance Financial Group Bhd.

Allianz’s life insurance business through bancassurance is among the fastest growing in Malaysia, growing in double digits for the financial year ended Dec 31, 2008 and 18% to 19% in its first quarter ended March 31.

“Subsequently, it also means there will be pressure on margins, more competition and for a short period of time, opportunistic behaviour in the market which we will not participate in,” Ankel said.

“We are looking for sustainable partnerships with banks that grow over the years and we don’t just want to be a product provider and throw one product to this bank and another product to that bank; we are not going to play that game.”

On other aspects of deregulation, Allianz General Insurance Company (M) Bhd chief executive officer Ng Hang Ming said Allianz did not intend to open any new branches this year, but would continue its initiative to combine its life and general insurance branches.

Last year, branches in 10 cities in Malaysia had been consolidated and another seven are scheduled to follow suit this year.

The company was also not considering any mergers or acquisitions at this time, said Ankel.

As for the two family takaful licences expected to be open for tender in October, he said Allianz had not made “a strategic decision at this time,”

“Are we seriously considering it? Yes,” he added.

--staronline

Qatar Insurance Commences Operations

2009-06-26T13:49:00.002+06:00

Services can be accessed through internet, making it cost-effective for local, regional and multi-national transactions

Qatar Insurance Services (QIS), which supports trading between insurers, re-insurers, brokers and other (re)insurance professionals, has formally started its operations, reported the Peninsula.

Trading as Qatarlyst, a wholly-owned subsidiary of the Qatar Financial Centre Authority, a web-based work-flow solution that can be accessed through internet, making cost-effective for local, regional and multi-national transactions.

Initially QIS will handle Reinsurance Fac and Treaty business for the major commercial risk classes common to the region - property and casualty (P&C), aviation, marine, construction, space and energy. Later on, it will handle primary insurance of the same classes. It will also handle Shari’a compliant Re-Takaful placements.

James Sutherland, CEO of Qatarlyst, said: “We have created Qatarlyst for the transaction chain which can be made more resourceful through the smart use of sophisticated yet accessible technology. Besides, by building a community of trading counterparties on Qatarlyst, users will benefit from access to potential new business and improved transaction standards.”

The insurance sector is set for major growth in the Gulf region, namely asset management, having around $18 trillion worth assets under management.

--Insurance Business Review

Takaful Malaysia eyes 10% increase in customer base with Takaful myDesk

2009-06-24T15:44:00.003+06:00

Syarikat Takaful Malaysia Bhd (STMB) targets a 10% increase in customer base from 400,000 currently for its financial year ending June 30, 2010 with the launch of its latest initiative – Takaful myDesk – with Lembaga Tabung Haji (LTH).

Takaful myDesk is a one-stop centre for customers to carry their takaful transactions for all general and family-related takaful products at various LTH branches.

Through Takaful myDesk, STMB also hopes to achieve RM1mil worth of premium contributions in its first year of operations.

STMB group managing director Datuk Hassan Kamil said the collaboration was part of its strategy to enhance access to wider potential customer base, through sharing of database.

“We see this ‘smart partnership’ as a strong platform for various business opportunities, including cross selling of insurance products with investments and savings. We also hope to further reach out to customers, especially in remote areas, utilising LTH’s extensive network nationwide,” he said at the launch yesterday.

He added that the cost of the initiative was minimal as all that was required was Internet connectivity and one staff to man the desk located at LTH’s branch.

STMB’s majority shareholder is BIMB Holdings Bhd, with a shareholding of 65.22%. LTH in turn, is a majority shareholder in BIMB, holding 41.92% shares.

LTH group managing director and chief executive officer Datuk Ismee Ismail said with the inclusion of the Takaful myDesk to its list of additional services, it hoped to help promote the Islamic financial services sector within Malaysia. “Since the introduction of Takaful myDesk at our Jalan Tun Razak branch, LTH’s depositors have been very receptive towards the concept and execution of this new service,” Ismee said.

Due to this encouraging response, Hassan said that they had identified 11 other LTH branches to carry this service, and would be implemented in stages within the next six months.

--thestaronline

New Acting Manager for Aman Sharjah and the Northern Emirates

2009-06-22T11:47:00.003+06:00

In an attempt to allow Young Emiratis to lead and excel in all business fields, Dubai Islamic Insurance and Reinsurance (AMAN) has promoted Miss Amal Alrayisi to Acting Manager for Aman branch office in Sharjah and the Northern Emirates.

Miss Amal holds several certificates specializing in Takaful. She has also attended several training programs on Takaful and Insurance. Prior to the position, Miss Amal was the assisting manager of Family Takaful and Bancatakaful at the Aman Headquarters in Dubai.

“Appointing Miss Amal as the new Acting Manager for Sharjah and the Northern Emirates is part of our strategy to offer Emiratis exciting and enriching opportunities that will enhance their careers and contribute to the development of this country, said Mr. Hussein Al Meeza, Managing Director and CEO of AMAN.

Mr. Al Meeza added:

“The total number of UAE nationals working at Aman Insurance has increased to 30% however we are always looking to increase that number further.’’

--Eye of Dubai

Minister Highlights Role Of Insurance Firms

2009-06-22T11:41:00.004+06:00

Insurance providers have an important role in enhancing the insurance penetration in the country and helping the nation realise its aspiration to become a reputable insurance hub, the Acting Minister of Finance said yesterday.

Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abd Rahman Hj Ibrahim urged insurance and takaful (Islamic insurance) providers to play a more active role in raising awareness on insurance through public education programmes, highlighting the benefits of insurance with regards to financial planning.

"For its part, the Ministry of Finance will continue pursuing its programme to raise public awareness on financial issues, including insurance and takaful, illegal investment schemes and others," he said.

The Acting Finance Minister said that the government would carry on improving the country's financial sectors. He noted the recent enactment of the Takaful Order 2008 and Takaful Regulations 2008, which aimed to "harmonise" the regulatory framework governing both conventional insurance and takaful activities.

"The regulatory framework will be periodically reviewed to ensure a healthy functioning of the industry in the country," he said.

Aside from onsite visits to local companies and operators, the ministry through its Financial Institutions Division will also discuss areas of development in the sectors with industry players.

Pehin Dato Hj Abd Rahman was speaking during the opening of Great Eastern Life's new branch office in Kg Kiarong. He said that the company, well known as the longest established life insurance firm in Southeast Asia, commenced operations in Brunei more than 30 years ago.

"I highly commend the company, especially for its commitment to a policy of localisation for its human resources needs in Brunei Darussalam, in spite of insurance being a very specialised and sophisticated field of finance," he said.

Speaking on the current global economic crisis, the Acting Finance Minister said that Brunei has managed to "weather the storm relatively well", but stressed that this was not a reason to become complacent.

He called on all stakeholders to cooperate to ensure that this financial stability is maintained through reflecting on the experiences of others and learning from them.

Chairman of Great Eastern Holding Ltd Fang Ai Lian said that the opening was proof of the company's commitment to their policyholders and the people of Brunei.

"For the past 34 years, we have been operating from a rented premise," she said. "Today, we are proud to be the first life insurer in Brunei to operate from an office building we can call our own. This new office comes with improved facilities to allow us to better serve our policyholders".

--Brunei Times

Firm signs distribution deal

2009-06-20T13:14:00.004+06:00

Bahrain-based takaful provider t'azur Company has signed a distribution agreement with Tas'heelat Insurance for its motor and property plans.

"We are delighted to partner with a highly regarded firm such as Tas'heelat Insurance and believe that this will be beneficial to both parties," said t'azur Company chief executive officer Nick Frei.

"With their extensive reach to over 20,000 customers, Tas'heelat Insurance is one of Bahrain's leading retail insurance distributors."

t'azur is dedicated to exceeding the expectations of its participants by setting new standards of takaful innovation and service quality.

Tas'heelat Insurance, in turn, aims to give customers the right information and professional advice, so that they can make an informed decision.

"Tas'heelat Insurance is proud to work with t'azur to introduce their innovative takaful products to our customer base," said Tas'heelat Insurance general manager, Ali Al Daylami.

Promoted by Unicorn Investment Bank, t'azur was established in November 2007 with an authorised capital of $500 million to capitalise on untapped opportunities and immense growth potential across the international insurance sector.

--Gulf Daily News

PQGTL assigned BBB+ rating

2009-06-20T13:07:00.002+06:00

Pak-Qatar General Takaful Limited (PQGTL) has been assigned an initial Insurer Financial Strength (IFS) rating of BBB+ (Triple B Plus) by JCR-VIS Credit Rating Co Ltd with a positive outlook.

The rating incorporates strong sponsor support from Qatar-based financial institutions having sound credentials, said a JCR-VIS press release Friday. The rating takes into consideration the focus of the company on establishing a strong control environment, development of manuals and standard operating procedures (SOPs) and implementation of MIS, which has been deployed and tested in International Islamic Financial Institutions.
--Daily Times

Tradex and Allianz Takaful sign a cooperation agreement

2009-06-18T15:17:00.003+06:00

Tradex, the specialist car sales company, and Allianz Takaful have signed a cooperation agreement, which will allow Tradex to start offering Allianz Takaful's Islamic insurance services to its clients.

--ameinfo

BIMB will retain stake in Bank Islam, says MD

2009-06-18T15:08:00.002+06:00

BIMB Holdings Bhd does not intend to sell its 51% stake in Bank Islam (M) Bhd, says group managing director Datuk Johan Abdullah.

“It is a major core subsidiary and in terms of revenue and net profit contribution, we had about 80% as at last year. This is a strategic investment for us,” he said after the company EGM yesterday.

Bank Islam is currently controlled by BIMB with a 51% stake while Dubai Islamic Investment Group owns 40% and Lembaga Tabung Haji 9% .Talk was rife earlier in the year of a possible merger between Maybank Islamic and Bank Islam.

BIMB has since said it was not in talks to merge Bank Islam with Maybank Islamic but would continue to look for potential partnerships that would be strategic to its business.

Bank Islam managing director Datuk Zukri Samat also said yesterday that the bank was still looking for merger and acquisition opportunities. The RM540mil that it would raise by selling preference shares to shareholders would “give a bit more leeway” for this purpose, he said without elaborating.

On another matter, Johan said talks between its subsidiary Syarikat Takaful Malaysia Bhd and Abu Dhabi-Kuwait-Malaysia Strategic Investment Corp to dispose the takaful operations to the latter were still “ongoing”.

“Due the market conditions, some parameters have changed. We are revisiting a whole wide spectrum of new issues,” he said.

--thestaronline

Mena IPO stocks surge 38% in a year

2009-06-18T13:41:00.003+06:00

The average appreciation witnessed by IPO stocks in the Mena in the past 12 months is 38.04 per cent, reveals exclusive research by Emirates Business.

This paper tracked 42 IPOs floated since June 2008 on 10 stock exchanges in the Middle East and North Africa (Mena) and found that Dar Al Takaful, listed on the Dubai Financial Market, has seen a 198 per cent appreciation since flotation (August 4, 2008) and is the best-performing IPO so far in the past 12 months.

Others among the top five are the Saudi Stock Exchange-listed United Co-operative Assurance Company (appreciation since flotation: 193 per cent), Damascus Stock Exchange-listed International Bank for Trade and Finance (165.2 per cent) and Arab Bank - Syria (152.4 per cent), and Kuwait-listed Al Soor Fuel marketing Company (147.62 per cent).

The Nasdaq Dubai-listed Damas International brings up the bottom of the rankings, having witnessed a decline of 72 per cent since its flotation on July 8, 2008.

Amman-listed Jordan Masaken for Land and Industrial Development Projects (-31 per cent), Sura for Development and Investment (-30 per cent), United Group Holdings - Jordan (-28 per cent) and Sabaek for Investments (-27 per cent) are the rest of the bottom five.

Dar Al Takaful also saw the most appreciation on the first day of its getting listed (437.5 per cent), while Jordan Masaken for Land and Industrial Development Projects saw its share price plummet 42 per cent on the first day of its listing.

Of the 42 stocks that this paper tracked, 26 have appreciated since their flotation, while 16 have lost in value since flotation. IPOs in the GCC (including Nasdaq Dubai) have performed even better, with 19 IPOs witnessing an average appreciation of 53.57 per cent.

GCC-wide, Saudi Arabia witnessed the most number of IPOs (nine), while the UAE witnessed five IPOs – four on the DFM and one on Abu Dhabi Exchange. Kuwait and Muscat exchanges saw two companies getting listed while Nasdaq Dubai saw one. Mena-wide, the Amman Stock Exchange saw 13 IPOs listed in the past year, while six companies listed their shares on the Damascus Stock Exchange, followed by three on the Casablanca Stock Exchange and one on Tunis Stock Exchange.

The IPO of Drake and Scull International was the most oversubscribed at 101.50 times, while the Alentkaeya for Investment and Real Estate Development was the most undersubscribed at 0.06 times.

--Business 24/7

Emirates NBD promotes Shari’ah compliant banking at Jumeirah Beach Residence’s “The Walk”

2009-06-16T10:24:00.002+06:00

Emirates NBD, the region’s largest banking group in terms of assets promoted its Shari’ah compliant banking products and services at the Jumeirah Beach Residence on The Walk last weekend.
Emirates NBD displayed its extensive range of conventional Shari’ah compliant savings and protection plans which assist customers in reaching their monetary planning goals. The plans offer help with areas such as children’s education, retirement, life & accident protection, long term capital appreciation and general savings. There were some exciting prizes also on offer for interested parties including Magrudy’s vouchers and various dinner vouchers.Emirates NBD’s Takaful and Savings Programme is a Shari’ah compliant, regular savings plan that helps customers increase their savings over a certain duration with Takaful protection for a secure future. Takaful is an Islamic insurance concept based on the principles of the Islamic banking transactions mutual assistance and voluntary contribution. This product consists of choices between monthly, quarterly, half yearly, yearly and low regular contributions.There is also an option of professionally managed Shari’ah compliant investment strategies. In addition this programme offers online underwriting approvals. The Super Saver is a savings scheme with choices on professionally managed funds. It consists of low regular contributions, lump sum options and monthly, quarterly, half yearly and yearly contributions.Mr. Suvo Sarkar, Vice President and General Manager Retail Banking at Emirates NBD said, “We are always devising innovative ways to be near our customers. It is essential to take our services to them and provide them with the details of our many products and banking alternatives. Today’s customer is always on the go, therefore we adapt to better suit their needs by becoming more mobile and utilizing effective channels to create more awareness about the products and services that are available for customers to take advantage of. Our initiatives are always centered around the customer and what is most convenient for them.”This booth at The Walk provided an easy way for customers to learn more about these programmes. The convenient location allowed Emirates NBD to reach out to customers and offer them comprehensive information on the bank’s many Shari’ah compliant banking methods.

--arabianbusiness.com

Noor Takaful Teams up with Mondial Assistance Group to Launch Travel Takaful Services

2009-06-10T09:31:00.002+06:00

Noor Takaful, the Islamic insurance arm of Noor Investment Group, today announced it has teamed up with Mondial Assistance Group, the world’s largest provider of emergency services, to launch Travel Takaful comprising a wide spectrum of support services for contingencies arising during foreign travel.
Coinciding with the approaching holiday season, ‘Travel Plus’ and ‘Travel Gold’ are value-added, tailor-made takaful packages designed to assist customers who may need assistance during flight cancellation and delays, loss of luggage, emergency situations, incurring of specific liability, and covering of accident and medical expenses.

Parvaiz Siddiq, CEO, Noor Takaful, said: “Noor Takaful prioritises the delivery of products and services that have the convenience of our customers at its core. Our travel solutions offered in conjunction with Mondial Assistance is guaranteed to provide an effective and professional response to travel emergencies at any given time of the year. We are confident that both offerings will be widely welcomed by our customers for its broad-ranging benefits, particularly with the upcoming travel season.”

--Eye of Dubai

PQFTL, ICAP sign Takaful agreement

2009-06-10T09:26:00.006+06:00

Pak-Qatar Family Takaful and Institute of Chartered Accountants of Pakistan have signed an agreement under which all the members, students and employees of ICAP across the globe will be provided with an option of having Group Family Takaful protection through Pak-Qatar Family Takaful. Pak-Qatar Family Takaful CEO P Ahmad and ICAP-Benevolent Fund President Khaliq-ur-Rahman signed the agreement on behalf of their respective organizations.

--Daily Times

71 percent participants appreciate Islamic banking: survey

2009-06-09T17:41:00.002+06:00

In the first national survey on Islamic banking and Takaful, conducted in 85 cities of Pakistan, 71 percent of the participants appreciated it. A spokesperson of AlHuda Centre of Islamic Banking and Economics (CIBE ),on Monday, revealed that they conducted the first national survey on Islamic banking and Takaful to analyse the trends, problems, opportunities and challenges of Islamic banking and the Takaful Industry.

The survey was started on April 15 and closed on May 15, covering 85 cities, including Peshawar, Quetta, Islamabad, Karachi, Lahore, Azad Kashmir and many other small cities of Pakistan. The target audience of the survey was the Chamber of Commerce, Business and Trade associations, Universities and professional institutions like the ICMAP, ICAP, etc. This is the first-ever survey in Pakistan for preparing effective strategies concerning trends about Islamic banking and Takaful.

In this survey, 71 percent of the participants appreciated Islamic banking and Takaful. 13 percent, thought it to be the same as conventional banking and insurance, while 16 percent did not give an opinion from ignorance about Islamic banking. 41 percent admitted that Islamic banking services are available in their region, while 59 percent denied that Islamic financial institutions existed in their regions.

It was also revealed that only 11 percent availed the benefits of Islamic banking benefits, while 89 percent had their account in conventional banks. When conventional account holders were asked, they replied that they 'would favour Islamic banking if they were offered the same facilities,' 63 percent said 'yes' and 31 percent said 'no', while six percent remained neutral.

When Islamic banks account holders were asked about the products for financing, 38 percent named Ijarah, 34 percent Diminishing Musharkah and Murabah, while the rest mentioned other products.

--Business Recorder

DFM makes gains to break 2,000 barrier

2009-06-05T15:20:00.002+06:00

Dubai Financial Market broke through the "psychologically important" 2,000-point barrier yesterday, sustaining a bull-run for the eighth consecutive session.

In what experts termed a great relief for anxious investors and financial institutions, the DFM general index closed at 2,025.55 points and showed a net gain of 1.82 per cent, or 36.17 points, compared to its previous close of 1,989.39 points.

"The DFM index broke the important psychological mark of 2,000 points yesterday. Going by the encouraging and positive trading, a 2,200-level is possible soon. We will see some profit taking also," said Sherif Abdul Khalek, trading manager at Beltone Financial Institution.

The DFM general index opened lower at 1,960.56 points and immediately eased to 1,955.91 points before rising towards the key 2,000 mark at 11am.

The buying support in Deyaar, DSI, Arabtec, DIB, Gulf Navigation, Mazaya, Takaful-Emarat, Dar Takaful and Emaar stocks took the index to its higher levels. The closing level of 2,025.55 remained the day's highest and this indicates the positive buying support throughout the session.

Trading value remained on the higher side, with a turnover of Dh1.7 billion and more than 1,235 billion shares traded in 16,696 transactions. The main volume pushers were Emaar, DFM, Deyaar, DSI and Arabtec.The list of losers includes Ekttitab, Shuaa, Al Salaam-Sudan and ACICO.

In the capital, the Abu Dhabi Securities Exchange, after witnessing significant gains on Wednesday, closed flat yesterday on the back of profit taking. Showing a mixed trend, the ADX index eased 6.90 points, or 0.25 per cent, at 2,803.16 points. The turnover was recorded at Dh711m with 417 million shares changing hands in 6,086 transactions. Sixteen stocks closed higher with an equal number moving down, while eight scrips remained unchanged in value. The shares of Aldar, Sorouh, Dana Gas, Abu Dhabi National Energy Company (Taqa), RAK Bank, Emirates Driving and Asmak fell.

--Business24-7

New avenue to issue bonds

2009-06-05T13:49:00.003+06:00

Securitisation of takaful premiums is possible but subject to thorough study
With the corporate bond market in a moribund state, another avenue for bond issuance is via the securitisation of takaful premiums.

According to Syarikat Takaful Malaysia Bhd (STMB) chief investment officer Azian Kassim, the idea is possible but it should be subjected to a thorough study “as the underlying principles of takaful business is totally different (from) that of conventional.”

Maybank Investment Bank Bhd fixed income research head Tan Chee Wee noted that car financing had already been securitised.

“It is the same as the securitisation of car financing – those borrowers are making the monthly payments that are in turn channelled into payment of interest rates on the bonds issued against these auto loans,’’ he said.

In this case, it would be the takaful policyholders who would be providing the cashflow.

“I would say it works, but the important thing is from an investor’s point of view to not just look at the structure but also understand the background of those who bought takaful insurance,” Tan said. “At the end of the day, it boils down to the individual credit of all the people who have taken (takaful) insurance and who are paying the premium on a yearly basis.”

At present, an example of an auto finance-backed corporate bond is the secured fixed rate bond issued by Cepat Assets Bhd.

Securitisation, the process of pooling and repackaging cashflow-producing financial assets into bonds, will provide an opportunity for takaful operators to unlock the value of the underwriting business by transferring certain portions of risks to capital markets.

Azian said the move would require “concerted efforts from various parties for this to happen and among other things, the regulator and syariah board need to be involved.”

“As no such product has been made available in the Malaysian market, the regulatory requirements are yet to be determined. However, given the recent fallout of the collateralised debt obligation (CDO) market in the United States, it is assumed that the regulatory bodies would be very stringent in approving such products,” she added.

For the syariah board, concerns involve the structure for the transaction and also the usage of takaful contributions as the underlying asset.

“At this juncture, there is no plan to securitise takaful contributions. However, we would keep our options open to this new innovative capital market instrument. Should there be any opportunity to embark on such a transaction, the viability of such exercise would be assessed accordingly before any decision is made,” she said.

For the year ended Dec 31, 2008, the total net contribution income for all the takaful operators was RM3.025bil, while total takaful fund assets stood at RM10.569bil.

As to how much this would translate into the potential value of bonds, Azian said: “We do not have any estimates as this is still subject to a detailed study by all respective parties especially capital market players.”

Due to the global financial crisis, there have been calls to move away from complex securitisation schemes since the US subprime collapse is partly blamed on asset-backed securitisation linked to mortgages.

“In our view, the subprime crisis was not a result of complex securitisation schemes but due to a combination of a lack of regulatory supervision and proper assessment by the investors,” she added.

Azian reckoned that the securitisation of takaful contributions would spread the risk more broadly rather than just “warehousing” it in a particular takaful company which has lower capacity and diversification potential than the capital market as a whole.

“The removing of risks from the takaful industry would reduce transaction, agency and regulatory costs, thus increasing the efficiency of capital. Investors would also benefit from the availability of new classes of securities.

“Furthermore, securities based on risks associated with the takaful industry such as catastrophic, mortality and longevity risks are likely to have a relatively low co-variance with market systematic risk, making them even more valuable for diversification purposes,” she said.

However, Azian cautioned that such securitisation must be accompanied with stringent surveillance from the regulatory bodies and proper product education.

--The Star Online

Manulife to apply for takaful licence soon

2009-06-05T13:43:00.002+06:00

Insurer Manulife Holdings Bhd will submit an application before the end-October deadline for a takaful licence in a bid to tap into the growing Islamic insurance market.

The plan by Manulife to seek a takaful licence is in line with the Government’s move to liberalise the financial sector and allow more takaful players into the market.

The liberalisation, among others, would see up to two new family takaful licences being granted this year and allow, with immediate effect, the increase in foreign equity participation in insurance companies and takaful operators to 70% from 49% now.

Group chief executive officer Michael Y.L. Chan said as a company with a global reach and experience, Manulife was heeding the Government’s call to make Malaysia a regional Islamic finance hub.

“We, too, want a slice of the booming takaful market as the present penetration rate in this segment is about 7% compared with about 40% in the conventional side,’’ Chan told StarBizWeek.

Having a takaful business fits into the group’s aspirations as currently, it has takaful operations in Indonesia.

Chan said it would also be beneficial to the group as the takaful operations could be later expanded to the Philippines, Thailand and China, where Manulife Group had a significant presence.

On whether there are plans by its foreign shareholder, Manulife Financial Corp, to increase its stake in the company with the financial sector liberalisation, Chan said it had plans but, at the moment, there were no firm decisions by the board.

On its newly-formed unit Manulife Unit Trust Bhd, Chan said the company would launch three funds in September – a global resources fund, a China-related product and a fund that would invest solely in India.

He said the global resources fund would be the first to invest in precious metals and energy.

As for the China and India funds, Chan said these two economies were powerhouses of Asia and offered huge markets, and they experienced good growth despite the grim economic environment.

He also expects 300 of its total agency force of nearly 1,500 to sell unit trusts this year and about 50% to do so in 2010.

As for its new business premiums, Chan said Manulife expected a 5% growth this year from RM63mil achieved last year.

He said the company planned to unveil two life protection-based products by year-end.

--The Star Online