Kazakhstan is the central hub of Islamic finance for CIS countries

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.

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.

Islamic Microfinance Network ( IMFN ) now unlock for membership worldwide

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

(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

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

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

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

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/

Halal brands has potential to make Pakistan proud, prosperous, says minister

ISLAMABAD: Enormity of Halal business cannot be denied whereas importance and significance of value added exports in any economy could not be over emphasized, said Minister for Science and Technology Mir Changez Khan Jamali. He said contrary to the common understanding, Halal business was not limited to Muslim communities and countries rather because of its high hygienic values the Halal products are attracting non-Muslims as well. He was chairing the first meeting of National Steering Committee for promotion and development of Halal products, on Friday. The minister said Halal market and Halal branding was today a global phenomenon and it had the potential to make Pakistan proud and prosperous. The minister said without research and development no industry could go far in that competitive world so S&T organisations had to make sure that private industry was fully supported by applied Research & Development work. Jamali said there were only four Islamic Republics in the World including Pakistan, Iran, Afghanistan and Mauritius, and Pakistan was the only country with such a potential for production and export in Halal market. The participants included Federal Secretary Irfan Nadeem representatives from Ministry of Religious affairs, Ministry of Food and Agriculture, Ministry of Live Stock and Dairy Development, Ministry of Industries and production, Ministry of Commerce, and Ministry of Law, Board of Investment representative of each province, Lahore and Karachi Chamber of Commerce etc. staff report

Courtesy By: Daily Times

Growth expected for Malaysian Insurance Sector

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

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

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

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

.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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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