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Syarikat Takaful Malaysia Bhd will offer an additional 15 per cent no claim rebate to all its participants in the general and selected family takaful products. Moreover, the company will increase its value added service delivery amidst tougher competition. It was reported that Takaful Malaysia is confident of disbursing about RM35 million in no claim rebate this year to its customers given the positive growth in its General Takaful portfolio. Group managing director Datuk Mohamed Hassan Kamil said last year, Takaful Malaysia paid out a record RM31 million in no claim rebate to its customers, adding it is optimistic on capturing a more than 50 per cent market share from the current 40 per cent.
Kenya's only Shariah-compliant insurer Takaful Insurance of Africa Ltd (TIA) plans to expand its operations into five East African nations, according to its Chief Executive Officer Hassan Bashir. Under TIA’s five-year plan it will expand into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland, where it was granted a license this year. CIC Insurance Group (CIC) is one of the largest investors in TIA with about 22 percent, while four investment companies also have stakes. In Kenya, TIA has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, Bashir said.
London-based firm Cobalt has developed a sharia-compliant insurance platform that uses a syndication model to help spread risk across a panel of underwriters. Cobalt allows multiple insurers to pool their capacity and each can subscribe to the desired level of risk though individual Islamic Windows. The company aims to address capacity constraints in the takaful industry. The platform allows each insurer to have a takaful window, where policyholder funds are segregated from conventional funds, without affecting their rating levels and helping price the risk competitively. The risk is priced by a lead insurer and other firms must then subscribe under similar terms, a similar approach to the subscription model used in London's insurance market.This novel format could boost capacity in the sector.
German insurer Allianz Malaysia is still keen on takaful business but is in no rush to get a licence, according to its CEO Jens Reisch. The Bursa Malaysia-listed company is involved in both general and life businesses, but unlike most other insurers, it does not have any takaful tie-ups. Reisch added that Bank Negara Malaysia (BNM) is not issuing any new takaful licence. He believes, however, that the implementation of the Islamic Financial Services Islamic Act (IFSA) will consolidate the industry and require additional capital for family takaful licence. Reisch also said that they were reviewing takaful constantly and closely, and if there was a chance to get a licence or a chance to team up or acquire another takaful company, his company would explore.
Takaful Ikhlas Sdn Bhd is looking to boost its family takaful business, regarded as a long term saving mechanism, to drive the company's growth and profitability further. According to its president and CEO Ab Latiff Abu Bakar, the company's family takaful business should grow by another 10% to contribute 70% of its gross contributions in the next three to four years. For the financial year ended March 31, 2012 (FY12), family takaful made up just over 60% of the operators contributions at RM501 million. One opportunity for growth is the expansion into corporate or group business which remains under-penetrated but a good way to reach the masses at a faster and cheaper rate. Takaful Ikhlas will also look to introduce new products packaged with Islamic services to further grow its family takaful segment.
The Nigeria Deposit Insurance Corporation (NDIC) said yesterday that it has assessed the deposit liabilities of Jaiz Bank Plc, and that in a couple of weeks, the bank will start paying premium as insurance cover for its depositors. NDIC Managing Director/CEO Alhaji Umaru Ibrahim said the premium collected from the bank would be invested in non-interest bearing instruments. A sensitisation workshop for NDIC solicitors was organized to educate the legal team because excessive litigations remained a major challenge to developing formidable deposit insurance system in the country. According to him, other challenges are the lack of proper understanding of the distinction in the legal status of NDIC as liquidator and deposit insurer by legal practitioners, the court and the public at large.
The Securities and Exchange Commission of Pakistan (SECP) has passed orders against a takaful company for not complying with the provisions of the Insurance Ordinance, 2000 and the Companies Ordinance, 1984. Further, SECP’s insurance division has also passed an order against a life insurance company under section 130(2) of the Insurance Ordinance, 2000. The SECP has also issued 13 warning letters and four show-cause notices to various insurance and takaful companies for contravening various provisions of corporate laws, insurance laws and related accounting standards and regulations. To maintain transparency and provide equal opportunities to all insurance surveyors, Pakistan Insurance Institute has been mandated to examine and check the competency of surveyors, on the basis of which the SECP will issue a licence.
Insurance major XL Group and Islamic specialist Cobalt underwriters will offer sharia-compliant insurance for companies buying commercial property, paving the way for Islamic investors to tap London’s subscription-based insurance market for the first time. The new offering will allow multiple insurers to take part in Islamic insurance deals, adding scale to the fledgling sharia-compliant insurance industry in the UK. Under Islamic insurance, premiums are reflected as contributions, capital is segregated from the participants' funds and there is transparency on cost. It's necessary to abide by the scholars' principles on how things should be structured.
A.M. Best Europe – Rating Services Limited has revised the outlook to stable from positive and affirmed the financial strength rating of C++ (Marginal) and the issuer credit rating of “b” of Boubyan Takaful Insurance Company (Kuwait). The revised outlook reflects Boubyan’s decision not to ring-fence assets in favour of policyholders. The risk-adjusted capitalisation of Boubyan’s policyholders’ fund remains weak. Additionally, recent management turnover adds uncertainty to the future performance of the company. Boubyan has experienced volatile operating results and is a small player in the Kuwaiti market. Concurrently, A.M. Best has withdrawn the ratings as the company has requested to no longer participate in A.M. Best’s interactive rating process.
The National Insurance Commission has released takaful guidelines which state that applicants seeking permits to conduct takaful transactions must own the certificate of registration as a fully-fledged takaful company. The guidelines also state that the company's name must contain words or terminologies that imply takaful operations. In addition, companies must at all times keep a minimum deposit in a non-interest financial institution.
The Saudi Capital Market Authority (CMA) board has approved Aljazira Takaful Ta’awuni Company’s (ATT) initial public offering (IPO) of 10,500,000 shares, representing 30 percent of its share capital, amounting to SR 350 million. The offer price will be SR 10 per share and the subscription period will be from May 13 to 19. ATT's chairman Abdulmajeed Al-Sultan said the step will improve the company’s financial position and enable it to realize its strategic objectives to become the local and regional leader of Shariah-compliant cooperative insurance. Despite being still under establishment, Aljazira Takaful Ta’awuni is considered to be one of promising companies in the cooperative insurance sector in Saudi Arabia.
Conventional insurers are proving to be tough competitors for major takaful operators given their big capacity, according to Nassib Barbir, deputy director of Takaful Re Ltd. Takaful operators must keep to Islamic roots and invest in research and development to create true takaful products instead of competing with conventional insurers, Ghassan Marrouche, CEO of Takaful Emarat – Insurance (P.S.C), said. Strong and credible retakaful operators are needed to assist the growth and expansion of takaful. Consistent Shariah compliance is a must for the industry to grow and mature.
Global Banking and Finance Review has announced Medgulf Allianz Takaful BSC (c) as the winner of the award 'Best Bancassurance Distribution Network Bahrain 2013'. The award honours the company's distribution network and regional presence. Medgulf Allianz Takaful was selected by the judging panel of Global Banking & Finance Review considering quality, performance and community commitment.
Kenya-based Takaful Insurance of Africa Ltd. plans to expand into five East African countries, including Tanzania, Somalia, Uganda, Ethiopia and the self-declared sovereign state Somaliland, as part of the insurer's plans for the 2013-2017 period, CEO Hassan Bashir said.
Thomson Reuters released a comprehensive guide to Islamic insurance titled "Takaful Primer 2013". The guidebook is authored by Dr. Omar Fisher who had earned a PhD. in Takaful through a combined graduate program of the International Islamic University of Malaysia and Camden University of Delaware in 2005. It features an introduction to Takaful system and its unique features. Furthermore, it includes current industry trends, worldwide statistics, and a perspective on the opportunities and challenges facing the Takaful industry. The guidebook contains an extensive glossary of terms in Arabic and English, together with a comprehensive directory of Takaful Operators globally.
Insurance group Great Eastern Holdings Ltd has no plans for merger and acquisition activities (M&A) as the valuations are high, according to its group chief executive officer Chris Wei. However, the company is closely watching the market. Wei added that the lofty offer prices were underpinned by multiple reasons, aptly that Asia being one of the most attractive markets compared with Europe and the United States, hence, attracting foreign capital. He said the group would continue to grow responsibly and further strengthen its position as a life company rather than just a life insurance company by promoting health in the communities it operated in.
Takaful Insurance of Africa Ltd. plans to expand its operations into Ethiopia, Tanzania, Uganda, Somalia and the autonomously governed enclave of Somaliland under its five-year plan 2013-2017. In Kenya, Takaful Insurance has four outlets and 80 agents in Nairobi and Mombasa. The company plans to add at least two more outlets this year and double the number of agents, according to its CEO Hassan Bashir. Takaful’s premiums totaled 430 million shillings last year.
The Malaysian government is encouraging takaful operators to invest abroad in order to internationalise its Islamic finance industry. Takaful operators will be allowed to invest abroad without limit, lifting a requirement for them to hold at least 80 percent of assets locally. However, Takaful firms in the country are usually reluctant to invest abroad due to a low risk appetite and lack of expertise. Furthermore, the domestic focus is partly due to ample supplies of sukuk in Malaysia. Another obstacle to internationalisation is the meagre experience of some Malaysian takaful firms. Dependence on local assets, however, has come at a price, with many takaful firms missing their target returns.
According to a report released at the opening of the 8th Annual World Takaful Conference (WTC) in Dubai on Monday, the growth of family takaful has outperformed the growth in conventional life insurance, with an annual growth rate of 32 per cent. Its gross contributions are set to treble to $5.6 billion by 2016. However, the latest industry data reveals a slight deceleration in the growth rates. A critical factor that will determine the industry's success is the existence of players with the right quality, as well their readiness to respond to new market opportunities. The report addresses the increased need for a pertinent reference source to help industry leaders navigate the evolving family takaful landscape.