Growth in takaful seen slowing slightly

Growth in the Islamic insurance industry, or takaful, has slowed slightly as a result of the global economic crisis but is still outpacing the Islamic finance sector as a whole, lawyers said on Tuesday.

"Growth in takaful is phenomenal," Peter Hodgins, partner at international law firm Clyde & Co, told the Reuters Islamic Banking and Finance Summit in Dubai.

"In percentage terms it is growing faster than the Islamic finance sector and 30, 40 or 50 percent growth in premiums is not unheard of."

He said growth in the takaful industry is slowing slightly as people have less cash to spend on what is considered to a certain degree to be a "luxury item", but it still has the potential to compete with conventional insurance.

A recent report by HSBC estimated the global takaful market at $14.4 billion by 2010.

Some takaful products being offered are not as attractive to certain clients because they are not considered Islamic enough, said Ashley Painter, a second partner at Clyde & Co.

"It is only an emerging industry, so as people do it more and more, they get more experience about what is acceptable and what is not," he said.

Under takaful, the risk and reward are shared between the customer and insurer, while in conventional insurance the insurer takes on all the risk for a premium.

Clyde & Co has offices in Dubai, Abu Dhabi, Doha and Riyadh and has been in the region for more than 20 years according to its website.

(Reporting by Jason Benham; editing by Sam Cage and David Cowell)

--DUBAI (Reuters)

Azhar A. Jaffri appointed as Director of Takaful

Karachi—Chairman & Chief Executive Officer/Managing Director House Building Finance Corporation is appointed as Director to the Board of Takafu! Pakistan Ltd. Takaful Pakistan

Limited was incorporated in June, 2006 with an authorized capital of Rs. 300 mi11ion, all fully paid-up. The Company is sponsored by reputable financial institutions both local and foreign, duly managed by a team of qualified and experienced professionals and supervised by a distinguished Shariah Advisory Board of international repute; House Building Finance Corporation Limited is one of the main sponsors of Takaful Pakistan Limited. The company has the capacity to underwrite risks in all avenues of General Insurance namely, Property (Fire & Engineering), Marine, Motor, Liabilities, bonds & guarantees etc.

In addition, the Company has the expertise and arrangements with overseas Takaful operators enabling it to offer comprehensive coverage for large infra-structure projects, specialized risks and umbrella/blanket covers specifically tailored for Islamic banking operations as well as for large corporate groups. The Company currently operates with a network of branches in seven major cities in the country.

Pakistan Observer

PruBSN launches recruitment drive

PETALING JAYA: Prudential BSN Takaful (PruBSN) has launched a recruitment drive to fill up more than 150 positions for its Bancatakaful division.

In a statement, PruBSN head of bancatakaful Mohd Hanafi Mohd Isa said the company was looking for fresh graduates to join as takaful financial executives (TFEs). He said once trained, the TFEs would be placed in selected Bank Simpanan Nasional (BSN) branches nationwide.

As part of the initiative to boost its human capital development, PruBSN increased its training budget by 60% from last year. PruBSN is a 51:49 partnership between BSN and Prudential PLC.

The Star

New CEO For HSBC Amanah Takaful

Zainudin Ishak has been appointed the new executive director and chief executive officer of HSBC Amanah Takaful (Malaysia) Sdn Bhd.

In a statement today, HSBC Bank Malaysia Bhd said, Zainudin had 19 years of hands-on experience in managing a conventional and Islamic insurance company.

"Before he joined HSBC Amanah Takaful, he was the chief executive officer of another local joint venture Takaful provider.

"He led the company to deliver business results and pursued initiatives with the joint venture partner in leveraging Takaful expertise in Malaysia," it said.

Zainudin, 42, started his career in the Broking Division of a local insurance operator in 1989 and from then on, served in various capacities especially in sales and operations as well as the customer services division.

-- BERNAMA

Nexus, Solidarity in Takaful deal

Nexus, the region’s leading financial adviser, and Solidarity Family Takaful, have joined hands to launch their portfolio of customised Takaful products and savings plans in Bahrain. These products have been designed to provide clients with a Shariah-compliant opportunity to protect wealth for the future, said the company officials. Demand for Takaful products– products which are compliant with key Islamic tenets and based on the concept of shared responsibility – in the Middle East has increased sharply in recent months, with clients appreciating the benefits of transparency and security of such products, as well as their adherence to Islamic ethical expectations. In 2008, the global Takaful market was estimated to be a $2.3 billion, with the Middle East region alone accounting for 46 per cent of total sales, according to the Bahrain Insurance Association. International growth of the Takaful market currently stands at between 15 to 20 percent per annum. Nigel Watson, general manager of Nexus Bahrain, said: “The Takaful market is becoming increasingly sophisticated in response to customer demand, providing an equivalent level of return to conventional financial products, as well as a high level of transparency and flexibility.” The Takaful portfolio will include takaful products such as education, start and retirement plans having protection, saving and investment features, as well as takaful pure term life and other Shariah-compliant protection plans. Gopi Rao, general manager of Solidarity Family, said the company was witnessing an increased demand for customised Takaful products in Bahrain. "As part of our commitment to offering flexible products, we are working with regional insurance experts such as Nexus to further develop advanced products suitable to client requirements in Bahrain," he explained. While Nexus offers a highly comprehensive range of personal and corporate financial products, it is confident that Takaful will emerge as one of its most popular lines over the next 12 months. “We believe that demand for this product range will continue to rise over the coming months, particularly as customer awareness increases." "We are excited to work with Solidarity Family Takaful, a company with demonstrated brand awareness and strong localised service and marketing support,” Watson added. -TradeArabia News Service

Foreign insurance firms are still welcome

By

Mohammed Elsidafy: The Ministry of Economy approved recently to licence four new foreign firms, including three Takaful insurance companies and one health insurance firm, said Abdul Muttalib Mustafa, Chief Executive of Oman Insurance Company.

Despite the market not needing new insurance companies, Mustafa called not to close the door on the foreign firms wishing to work in the UAE, provided that they operate via their capitals, not through capitals obtained from inside the market.

Meanwhile, a report issued by Dubai Chamber of Commerce and Industry's (DCCI) Economic Research Department on the future of insurance sector in the UAE is positive due to government measures and individual's high share in the Gross Domestic Product (GDP), according to Mustafa.

Depending on low demand for life insurance and car insurance's acquisition of the biggest share of non-life insurance, there are good opportunities to launch new attractive insurance products, like property insurance and health insurance, he said.

The DCCI's Economic Research Department had issued a report on the future of insurance sector in the country during international financial crisis as a reply to another report issued by Business Monitor International (BMI). The DCCI's report said the long-term prospects for the country's insurance sector look bright despite the short-term adverse impact of the economic slowdown.

The UAE had come third in the insurance business environment ratings (IBER) publishing by BMI in December. The IBER covered 10 countries in the Middle East, which took the following positions; South Africa, Israel, UAE, Bahrain, Saudi Arabia, Morocco, Oman, Qatar, Kuwait and Egypt.

According to the BMI's report, the UAE did not occupy a higher position due to the smallness of life and non-life insurance segments, situation of financial infrastructure and openness of each segment to new entrants.

However, Mustafa refuted what the report stated that the UAE obtained 5/10 in the rating of openness to foreign firms wishing to enter into the UAE market.

He said this is different from reality, as 28 foreign firms out of 53 are working in the sector. This means the foreign firms have a share of 53 per cent of the market.

The BMI's report called for more flexibility in legal legislations related to the insurance sector in the country and to improve the sector's financial infrastructure. It also called to draw up more policies related to transparency in the sector. Mustafa said: "Though the individual's spending on insurance in the UAE is low compared to developed countries, there are important government measures indicating promising future horizons in the field of the sector's financial infrastructure through the spread-our of health insurance in Abu Dhabi and other emirates.

In addition, a federal decree was issued recently, stipulating that any health services provider should not practice its work without having a profession risk insurance document."

Meanwhile, insurance expert Salah Al Halyan said the insurance sector has been affected by the fallout of the global financial crisis. He asked insurance firms to focus on profits of insurance activities rather than those of other investment sectors.

They should concentrate on profitable products and should review their assets to get rid of costly assets that might bring about new losses. Al Halyan expected the insurance sector to face big challenges as a result of a number of elements, primarily lack of liquidity which hit many projects, especially real estate, and which might lead to a retreat in insurance premiums.

Second is the likelihood of a drop in demand for insurance since some firms have cut down on part of their business. Also life insurance premiums have been affected by the departure of part of the labour because some projects have been stopped.

Another element within the challenges facing the sector is represented in investment by some insurance companies in the financial and realty markets, the two most affected by the crisis.

Also reinsurance companies have asked insurance firms to make reductions in insurance premiums and commissions. And world financial classification companies have reviewed the financial classification of local insurance companies as a result of the market situation.



Takaful market

Mithaq Takaful Insurance, a public joint stock UAE company with a capital of Dh150 million and listed on Abu Dhabi Exchange, has announced it will offer services to the public, bodies and companies through branches in Abu Dhabi and Dubai. It also announced it has signed a number of pacts with big world highly-classified firms in the field of Takaful reinsurance.

Through reinsurance agreements with world companies, Mithaq aims to avoid all potential risks and to achieve the highest security degrees.

Board Chairman Abdullatif Al Shamsi said that Mithaq has actually started operations through products compatible with the Islamic insurance market.

(Business 24-7)

Pak-Qatar Takaful Group First to Implement SAP

Pak-Qatar Takaful Group has signed a MoU with SAP Pakistan for the implementation of SAP modules in its Pakistan operations.

By signing this agreement Pak-Qatar Takaful becomes the first company in the Takaful/insurance sector and the second in the whole of financial services industry in Pakistan to implement SAP, achieving yet another pioneering feat.

Speaking on the occasion, CEO Pak-Qatar Family Takaful Limited, P. Ahmed said: “This sizeable investment in SAP is the continuation of our commitment to the people of Pakistan to provide need-based Takaful solutions and exemplary customer-service.” Pak-Qatar Takaful Group also invested in the procurement of state-of-the-art PentaTakaful systems from Malaysia, in 2008.

Asim Haque, Director, Financial Services Business, SAP Pakistan said: “We are delighted to be associated with Pak-Qatar Takaful, along with our Partner SHMA, in this project. It is very encouraging that financial services companies like Pak-Qatar Takaful are realizing the value that SAP has to offer to the financial industry in Pakistan.”

SAP is the world’s leading provider of ERP solutions with a global turnover of over US$12 billion. Today, more than 38,000 companies in more than 120 countries run SAP applications with 12 million users, from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations. SAP currently employs more than 51,400 people in more than 50 countries worldwide.

Mr. Omer Morshed, CEO, SHMA, commented: “SHMA has been at the forefront for introducing the concept of Takaful in Pakistan. SHMA is proud and privileged to be associated with Pak-Qatar Takaful Group’s pioneering initiative of implementing SAP.”

Sidat Hyder Morshed Associates (SHMA), established in 1986, is regarded as a renowned professional services firm in Pakistan providing management consulting and systems support services to clients locally and overseas.

Pak-Qatar Takaful Group is sponsored by leading financial institutions in the State of Qatar. The group has a wide geographic reach in the country and is quickly growing in its corporate and individual customer base.

Year 2008 was a historical year for the Islamic Banking in Pakistan

Islamic Banking grew immensely in Pakistan in spite of the economical crisis.

Lahore: The year 2008 was the best and a landmark year for the Islamic Banking in Pakistan during which the Islamic Banking industry grew far more rapidly as compared to the previous year. During the year, with an addition of 217 Islamic Banking Branches, the number of branches went from 289 to 506 expanding the network to various cities. At the end of December 2007, Islamic Banking deposits and assets were estimated at Rs. 147 billion Rs. 206 billion respectively, whereas there was a drastic increase of 30% to 40% in the reserves during the year 2008. New Islamic Financial products were introduced during the year. The state Bank of Pakistan also issued guidelines for Agricultural Finance and Islamic Micro Finance which have been the milestones for introducing the Islamic Financial products at the Micro level.

These thoughts were expressed by Mr. Muhammad Zubair Mughal, C.E.O, AlHuda, Centre of Islamic Banking in a seminar on Islamic Banking.

He said that besides 6 complete Islamic Banks in Pakistan, there are 506 Islamic branches of 12 conventional banks operating throughout Pakistan which includes 161 branches of Meezan Bank, 25 of Dubai Islamic Bank, 40 of Emirates Global, 102 of Bank Islami, 5 of Soneri Bank, 4 of Habib Metropolitan Bank, 16 of Bank of Khyber, 18 of Askari Bank, 3 of Royal Bank of Scotland, 4 of Bank-al-Habib, 5 of UBL, 11 of SCB, 40 of Alfalah, 1 of Habib Bank, 30 of Al-Baraka, 21 of Dawud Islamic Bank, MCB 8 and 5 branches of NBP .

He further said that currently there is worldwide global financial crisis which has been a major reason for the bankruptcy of various Banks and Financial institutes but in spite of the fact the Islamic banking system is gaining momentum globally which is evident through the facts & figures for Islamic banking in Pakistan.

ADIB reaffirms plans to expand and invest in its UAE workforce

Abu Dhabi Islamic Bank (ADIB), one of the world’s leading Islamic financial institutions, has reaffirmed its commitment to expanding and investing in its workforce in the UAE, while recognizing 70 existing employees who have been with the bank since its inception in 1998.
While the bank acknowledges the changed economic conditions in 2008, ADIB has not slowed down its ambitious plans to extend its business footprint in 2009. It is continuing with its strategy to attract and retain the best talent in the Islamic banking industry, and to continually invest in its workforce. Standing as testament to this strategy, the bank recently recognized the 70 employees still working at ADIB, out of the original 1500 who started with the bank 10 years ago, with a celebratory gala dinner held in their honour at the Emirates Palace in Abu Dhabi.
In the UAE, the bank is consolidating its workforce via a number of appointments across different divisions, strengthening its people-base in line with the organisation’s vision to become a top tier Islamic financial services group. Over the past few months ADIB has significantly bolstered its senior management team with hires from around the region and beyond, including in the Retail, Risk Management Finance and Branches divisions. This team building has reinforced ADIB’s position as one of the fastest growing Islamic finance institutions.
In Egypt, ADIB is currently building up its new management team, spearheaded by the recent appointment of Nevine Loutfy as market Chief Executive Officer.
ADIB, which marked its 10th anniversary in November, maintains a staff of 1500 in the UAE. The gala dinner recognising the 70 employees who have been with the bank since its inception was attended by the Chairman, H.E. Jawaan Awaidha Suhail Al Khaili, Managing Director, Mr Khamis Bu Haroon, and CEO, Mr Tirad Mahmoud, who presented a number of awards and certificates of appreciation to the employees.
AME