A.M. Best to Attend 2009 International Takaful Summit

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

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

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

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

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

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

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

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

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

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

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”

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

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

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

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

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

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

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

Takaful Ikhlas Implements Corporate Social Responsibility

The Minggu Saham Amanah 2009 (MSAM 09) in Johor Baharu in April and the Program Bersama PNB organised by Permodalan Nasional Berhad (PNB) in Kuching in May, offered space and ample opportunities for companies as well as banking and financial institutions to reach out to their target groups.

Takaful Ikhlas Sdn Bhd (Takaful IKHLAS), a company offering products and Syariah-based financial protection services for one, made maximum use of the opportunity and platform to implement its corporate social responsibility (CSR).

According to Takaful IKHLAS in a statement here today, in conjunction with the MSAM 09 and Program Bersama PNB, the company had undertaken various activities related to CSR such as a free medical examination and play activities with elements of education, apart from disseminating information on investments and financial planning to the community.

Takaful IKHLAS also handed over zakat contributions while undertaking a blood donation campaign.

Apart from helping in the social development of the local community, contributions as well as the community activities sponsored, were aimed at rewarding them irrespective of race or religion, the statement said.

According to the statement, the free medical examination received encouraging response from the public. At the MSAM 09 in Johor Baharu, this activity saw the participation of 600 visitors over the two days it was held.

Takaful IKHLAS also donated five nebuliser units -- equipment used by patients suffering from respiratory illnesses such as bronchitis and asthma-- to the Johor State Health Department.

At the Program Bersama PNB 09 in Kuching, Takaful IKHLAS sponsored the prizes for a children's drawing competition. It attracted 500 children from 49 KEMAS kindergartens in Kuching.

Takaful IKHLAS which began operations in July 2003 is a subsidiary of MNRB Holdings Berhad, an investment holdings company listed on the main board of Bursa Malaysia, with its main shareholder being PNB Berhad through Skim Amanah Saham Bumiputera.

Takaful IKHLAS has two customer services centres in Kuala Lumpur and Selangor as well regional offices in Kuala Lumpur, Kota Baharu, Johor Baharu, Sungai Petani, Kuching, Malacca, Kota Kinabalu, Kuantan, Ipoh and Putrajaya.

-- BERNAMA

Lawsuit arguing AIG bailout is unconstitutional can proceed

A lawsuit arguing that the federal bailout of American International Group Inc. is unconstitutional will be allowed to proceed in a federal court in Michigan.

The decision, handed down last week in the U.S. District Court for the Eastern District of Michigan, was made after a judge determined it was unconstitutional for AIG to receive the bailout funds from the U.S. government because AIG has subsidiaries that sell insurance designed to comply with Islamic law.

The suit, filed in December by Kevin J. Murray—a Michigan resident, a former U.S. Marine and a Catholic—alleges the U.S. Treasury Department and the Federal Reserve Board violated the Establishment Clause of the First Amendment. Mr. Murray, who filed the lawsuit “as a taxpayer,” alleged that the “appropriated funds (to AIG) are being used to finance Sharia-based Islamic religious activities” and are therefore “constitutionally impermissible,” according to court documents.

At the time the suit was filed, the U.S. government took a nearly 80% stake in the troubled New York-based insurer. The government has given AIG about $182.5 billion in aid to help the insurer avoid bankruptcy.

In December after receiving federal bailout money, AIG announced that it would provide takaful insurance, or insurance that complies with Islamic law, in the United States. In such an arrangement, members contribute money to a pool to guarantee each other coverage against loss or damage.

Though AIG had offered takaful insurance internationally prior to its troubles, the fact that the insurer made it available in the United States after bailout funds were received provided Mr. Murray with standing to bring the suit, Judge Lawrence P. Zatkoff said in his opinion.

“These facts, taken together, raise a question of whether the government’s involvement with AIG has created the effect of promoting religion and sufficiently raise plaintiff’s claim beyond the speculative level.” Judge Zatkoff added: “The financial circumstances of this case are historic, and the pressure upon the government to navigate the financial crisis is unfathomable. Times of crisis, however, do not justify departure from the Constitution.”

--Business Insurance

BIMB profit falls on lower takaful sales

BIMB Holdings Bhd’s net profit in the third quarter ended March 31 fell 68% to RM13.7mil from RM42.8mil in the previous corresponding period.

Revenue fell 9.1% to RM329.9mil during the period while earnings per share fell to 1.54 sen from 4.8 sen.

For the nine months ended March 31, BIMB’s net profit declined by 48.4% to RM78.8mil, or 8.84 sen per share. Revenue was slightly higher at RM1.07bil from RM1.06bil previously.

In a filing with Bursa Malaysia yesterday, BIMB said the group’s income bearing assets, which were derived mainly from Bank Islam (M) Bhd, grew by 23% against the previous corresponding period.

“However, this favourable effect on revenue is offset by the lower underwriting surplus secured from Syarikat Takaful Malaysia Bhd’s (STMB) operations, due to poor overall investment performance and slower sales from the ordinary family takaful business,” it said.

The lower profit before zakat and tax was also due to the lower recoveries by Bank Islam for the period under review, it said.

BIMB said there were also impairment losses on investment of RM15mil incurred by STMB and RM1mil incurred by BIMB Securities Sdn Bhd during the period.

--The Star Online

QFC Invites Local Financial Institutions To Operate In Doha

The oil-rich kingdom of Qatar, which has weathered the global downturn better than some regional financial centres, is offering immense investment opportunities to Malaysia firms in areas such as hydrocarbons, education, transportation, health and general infrastructure sectors.

Qatar Financial Centre Authority (QFC) chief executive officer and director general, Stuart Pearce, said the Qatari government has earmarked about US$150 billion for investments in its economy over the next five years from which companies can vie for valuable opportunities.

Established in 2005, QFC is a financial and business centre established by the Qatar government to attract international financial services and multinational corporations to grow and develop the market for financial services in the region.

QFC provides access to over US$140 billion in investments in the dynamic Qatari economy over the next five years as well as over US$1 trillion in planned investments in the Gulf Cooperation Council (GCC) covering six countries.

"The country has so far been able to weather the global downturn better than many of its five fellow GCC member states as the country has looked to new natural gas streams being brought on line to support economic growth," he told Bernama in an e-mail interview.

Formed in 1981, GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has plans to form an economic union by 2010.

Pearce said QFC welcomes Malaysian companies that support the financial services industry, such as legal, consultancy and accounting firms.

"The opportunity for firms from Malaysia is supported both by the dynamic Qatari economy and the government's commitment to continue its investment programme," he said.

He said the increasing trade between Qatar and the Gulf region as a whole as well as with Malaysia and other Asean countries would also underpin the attraction of investments for companies from Malaysia, he said.

"Total trade between Malaysia and Qatar as at December 2008 rose about 56 percent to RM1.7 billion compared with RM1.087 billion a year before," he said.

Currently, QFC has been doing relatively well, with over 25 new firms likely to set up offices at the centre this year while enquiries have risen significantly from a year ago.

He said Malaysian financial institutions would find real opportunities in areas such as Takaful and Retakaful business in QFC due to the small number of Islamic insurance companies available in the GCC.

"There are indeed opportunities for firms from Malaysia to establish takaful and retakaful business in the QFC and we look forward to meeting them and helping them to explore how best to approach this market," he said.

However, he said QFC was neither an offshore centre nor a free zone. It has a flat tax regime, levying 10 percent on profits generated by firms licensed by it.

Meanwhile, business can be trans-acted inside or outside Qatar, in local or foreign currencies.

It also allows 100 percent foreign ownership and all profits can be remitted to destinations outside Qatar.

Licensed companies also do not have to be on QFC's premises.

At present, the QFC hosts some 97 firms such as Barclays, Credit Suisse, Deutsche Bank, HSBC, Morgan Stanley and UBS, Pearce said.

As for Malaysian presence in Qatar, he said that about 1,800 Malaysians were residing and working in Qatar as of April this year.

Over 10 Malaysian companies operate in Qatar including Gamuda Bhd, UEM Builders, Sime Darby Engineering Sdn and Muhibbah Engineering Sdn. Bhd.

-- BERNAMA

Manulife to apply for takaful licence soon

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

MoU On' Takaful' Plan For UBD Army Cadets

Bandar Seri Begawan - A Memorandum of Understanding (MoU) to provide a comprehensive takaful or insurance plan for members of Universiti Brunei Darussalam (UBD) Army Cadet Platoon was signed yesterday.

The MoU between UBD and Insurans Islam Taib on Group Family Takaful coverage plan which is specifically designed for uniformed cadets is part of the university's efforts to give financial protection to its army cadets against casualties and body injuries during their training.
Acting Dean of Students, Dr Hj Ramlee Hj Tinkong, regarded the insurance coverage as a significant milestone in the achievement list for UBD's Army Cadets, which was established recently.

Named Platoon 9000, it has a member list of 16 men and 18 women cadets, including Her Royal Highness Paduka Seri Pengiran Anak Isteri

Pengiran Anak Sarah, who was present as the guest of honour at the event.
The comprehensive Takaful Package will assist the cadets in their endeavors towards being a successful association, Dr Hj Ramlee said.

The plan will provide monetary coverage for any injuries or death, incurred on any of the cadets during the duration of training.

The coverage runs for 24 hours a day and can be applicable for any training around the world.

The plan is valid for a period of one year as of today, and will also cover the army cadets instructors.

Signing on behalf of UBD Army Cadet Platoon, was Dr Azman Ahmad, acting assistant vice-chancellor of UBD, while Insurans Islam Taib was represented by Pg Hj Abd

Rahman Pg Hj Mat Salleh, chairman of the Board of Directors of the company.

Senior Manager of Insurans Islam Taib, Dk Norainin Pg Hj Sablon announced that other uniformed cadets such as police, fire rescue as well as members of Scouts, Girl Guide and Red Crescent associations, will soon be enjoying the same takaful protection coverage.

However, she did not elaborate on it further.

Present to witness the ceremony was Dr Hj Zulkarnain Hj Hanafi, the vice-chancellor of UBD, members of Insurans Islam Taib Board of Directors, permanent secretaries from various ministries and departments as well as officers from Tabung Amanah Islam Brunei (Taib) and its other subsidiary, Darussalam Holdings.

-- Courtesy of The Brunei Times