5 Interactive Distance Learning Programs on Islamic Banking and Finance

Thursday, April 30, 2009

Al-Hussein Opens al-Aqeelah Takaful Insurance Company

Damascus - Minister of Finance Dr. Mohammad al-Hussein opened on Wednesday, the first takaful (cooperative) insurance company in Syria with a capital of SP 2 billion.

In a statement to the press, al-Hussein affirmed that al-Aqeelah will provide a new dimension to the Syrian insurance sector due to its various services that meet the needs of a wide cross-section of the Syrian society, which include insurance services operating according to Islamic Sharia.

He noted that co-operative insurance companies amount to 30% of global insurance markets, estimating that such companies will achieve similar numbers in Syria, adding that the Insurance Supervision Committee agreed to license two new co-operative insurance companies for work in Syria, which are al-Nour and al-Amana.

The Minister pointed out to sectors that were included in mandatory insurance such as hospitals, labs, x-ray clinics, schools and universities, which were included due to the importance of these sectors and their responsibilities and the care for those who work in them and join them.

In turn, Director General of al-Aqeelah Firas al-Azem said the main activity of the company is co-operative insurance that complies with the laws of Islamic Sharia.

Regarding the company's services, al-Azem said al-Aqeelah signed a contract with GlobeMed International for managing medical costs, which will contract health service providers.

He also noted that profits from investments in Syrian Islamic banks amounted to SP 53.7 million.

CEO of al-Aqeelah Abdul-Hamid al-Dushti said the decision to invest in Syria was due to their belief and care for the future of the promising Syrian economy and their confidence in the opportunities that are provided by the investment environment in Syria, in addition to their desire to participate actively in the economic development process and meet the needs of the Syrian society.

The Syrian insurance market includes 13 insurance companies, two of which are co-operative insurance companies while ten are traditional insurance companies, in addition to the Syrian General Insurance Establishment.

By H. Sabbagh / Mazen

--SANA (Syria Arab News Agency)

New Takaful Licenses Will Help Industry Growth

The Life Insurance Association of Malaysia (LIAM) said the issuance of two new takaful licenses will further increase takaful penetration rate in Malaysia which is currently at a very low level.

Prime Minister Datuk Seri Najib Tun Razak Monday announced various measures to liberalise the financial sector, among them the offer of takaful licenses to players who can bring significant value proposition to Malaysia to spur the development of the industry.

In a statement Tuesday, LIAM said the issuance of new licenses will also attract strong and reputable takaful players to the country, and this will augur well for the positioning of Malaysia as an Islamic financial centre.

The association said the increase in the foreign equity limit to 70 percent from the existing 49 percent was a move strongly welcome by the industry as it will make Malaysia an attractive place for established international players to set up their operations.

The Malaysian Institute of Accountant (MIA) in a separate statement said this move will result in Malaysia being more competitive apart from boosting the country's economy and allowing better regional economic consolidation.

MIA said the move will not only boost the financial sector but at the same time facilitate to full the transfer of knowledge and expertise between locals and foreigners.


FACTBOX-Malaysia's financial sector liberalisation

(Reporting by Liau Y-Sing and Julie Goh; Editing by DavidChance)
Malaysia on Monday announced new measures to boost the country's financial
services sector, allowing greater foreign stakes in investment
banks and insurers, but keeping limits on commercial banks.

Following are the liberalisation measures as detailed by
the central bank. For related story click on [ID:nKLR459140]

Issuance of new licences


- Up to two new Islamic banking licences will be given in
2009 to foreign firms to set up banks with paid-up capital of
at least $1 billion;

- Up to two new commercial banking licences will be given
in 2009 to foreigners that have specialised expertise to
address gaps in the financial sector such as construction,
agriculture and infrastructure;

- Up to three new commercial banking licences will be
offered in 2011;

- Up to two new family Islamic insurance licences will be
granted in 2009.

Increase in Foreign Equity Limits


- Existing domestic Islamic banks can enter into
partnerships with foreign players through an increased foreign
equity limit of up to 70 percent. These banks will be required
to maintain a paid-up capital of at least $1 billion;

- Foreign equity participation in investment banks,
conventional and Islamic insurers will be increased to a limit
of up to 70 percent;

- A higher foreign equity limit beyond 70 percent for
insurance companies will be considered on a case-by-case basis
for players who can facilitate consolidation and
rationalisation of the insurance industry.

- However there was no move on the 30 percent limit on
foreign ownership of commercial banks
Operational flexibilities

- Locally-incorporated foreign commercial banks can
establish up to ten microfinance branches. Further branches
will be considered based on the effectiveness of these branches
in serving microenterprises;

- Locally-incorporated foreign commercial banks can
establish up to four new branches in 2010 based on a
distribution ratio of 1(market centre): 2(semi-urban):

- Locally-incorporated foreign insurance companies and
takaful operators are allowed to establish branches nationwide
without restriction;

- The restriction for locally-incorporated foreign insurance
companies and takaful operators to enter into bancassurance/
banctakaful arrangements with banking institutions is now

- Banks, insurance and Islamic insurance firms can employ
specialist expatriates;

- Offshore banking institutions licensed by the Labuan
Offshore Financial Services Authority that meet the
predetermined criteria can have a physical presence onshore
from 2010.

Takaful Market Expansion Drives Growth for PT Prudential in Indonesia

This (income tax) appears high but is due to the significant write-back from unrealized losses in our investment portfolio, and impact to our investment-linked reserve given declining equity prices," said Kevin Holmgren, president director at PT Prudential, in an interview.

Overall, the life insurer reported a 27.5% rise in total premiums to 7.02 trillion rupiahs, and new business premiums jumped 15.8% to 4.14 trillion rupiahs in 2008. Holmgren said the company's positive performance was a result of new customers supported by "strong" agency force.

Takaful premiums reached 844 billion rupiahs in 2008, of which 821 billion rupiahs came from new business. "The Sharia business marked another exceptional year which has contributed to the overall financial performance of Prudential Indonesia," said Holmgren.

Launched in September 2007, takaful business accounted for nearly 25% of PT Prudential's total business in Indonesia based on annualized premium equivalent by the end of 2008. Takaful premiums contributed about 20% of PT Prudential's new business premiums last year.

"We believe these numbers place us as the largest takaful provider in Indonesia. And with Indonesia's significant Muslim population, largest in the world, we are optimistic about the potential future growth of Sharia products within our business," Holmgren said.

In Indonesia, PT Prudential offers regular and single premium investment-linked products which feature three Sharia-based underlying investment funds. "We continue to develop and innovate Sharia products to meet our customers' needs," said Holmgren.

For product development, the life insurer said it will focus on long-term regular premium protection products which encompass conventional and Sharia unit-linked range of products, and on developing health and crisis cover riders.

Investment-linked products, which accounts for 95% of PT Prudential's total sales, are most popular in Indonesia, particularly a regular premium product.

Indonesia's low insurance penetration rate makes potential future growth remain "sizable," said Holmgren.

Last year, PT Prudential saw 52.6% growth in its customer base to more than 720,000, supported by large agency distribution. The insurer's agency force grew 43% to 57,000 agents and it is now the company's second-largest force in Asia after India.

In spite of the impact of the global financial crisis on bancassurance sales in many Asian countries, PT Prudential reported a 320% jump in bancassurance premium to 253 billion rupiahs in 2008.

Currently, Holmgren said PT Prudential's bancassurance operations are "small but are growing as we continue to expand and focus on this channel." Bancassurance accounted for 5% of total sales, with the remaining 95% from agency distribution.

In partnership with Citibank, UOB Buana, Standard Chartered, Bank Rakyat Indonesia and Danamon, PT Prudential is using a multichannel distribution strategy to gain market presence in Indonesia.

PT Prudential said in a statement Indonesia was the "strongest" market among Prudential's business units in Asia and it was also one of the "biggest contributors" to the group's business in the region last year.

Established in 1995, PT Prudential had seven sales offices and 161 agency offices across Indonesia by the end of 2008. The company's risk-based capital solvency stood at 206% in 2008.


Thursday, April 23, 2009

Takaful Ikhlas eyes RM2mil premiums from big bike product

Takaful Ikhlas eyes RM2mil premiums from big bike product


JOHOR BARU: Takaful Ikhlas Sdn Bhd, a subsidiary of MNRB Holdings Bhd, is targeting RM2mil in premiums from its new product – Ikhlas Big Bike Takaful – in the financial year ending March 31, 2010.

President and chief executive officer Syed Moheeb Syed Kamarulzaman said the company had decided to target the product at big bike riders as there was renewed interest in biking in Malaysia following the economic crisis.

“Statistics from the Road Transport Department show there are about 9,000 big bikes in the country and we want to tap the market,’’ Syed Moheeb told a press conference after the product launch yesterday.

He said the Takaful insurance coverage would be opened to owners of superbikes of 500cc and above. Under its comprehensive plan, bike owners will be compensated in the event of loss of life or damage to the machines due to accident or theft.

Syed Moheeb said policy-holders would also enjoy assistance in case of any breakdown without additional charges unlike conventional motorbike insurance coverage.

“Our survey showed that most of these big bike owners are businessmen and they need specially-tailored coverage for themselves and their machines,’’ he said, adding that contrary to popular belief, these bikers were well disciplined while on the road.


Future of Takaful in Pakistan promising

The third annual general meeting of Pak-Qatar Family and General Takaful companies was recently held in Doha. Sheikh Ali bin Abdullah Thani J. Al-Thani, Chairman of the Board of PQFTL and PQGTL, praised the performance of the two companies.

“The future of Takaful in Pakistan looks promising and we will continue to support and provide technical assistance to promote it in the country,” he added. “We believe Pak-Qatar Takaful has the financial strength and expertise to safeguard investments and meet the long-term investment needs of the people in Pakistan. We are rapidly expanding our distribution network in order to achieve our vision of providing financial protection to everyone, through Takaful,” he added.

“Pak-Qatar Takaful companies have managed to acquire significant corporate business in Pakistan,” he claimed. “We are currently present in major Pakistani cities and draw strength from hundreds of committed and experienced personnel in the country.” P. Ahmed, CEO PQFTL, M. Vaqaruddin, CEO PQGTL, Izzat al-Rashid, MD Qatar Islamic Insurance Company, and Abdulbasit al-Shaibei, CEO Qatar International Islamic Bank, attended the meeting. staff report

--Daily Times

Sri Lanka Amana Takaful cuts losses, sees scope in medical insurance

Sri Lanka's Amana Takaful Insurance said it made a premium income of over a billion rupees in 2008, helping to reduce losses, and that it expects medical insurance to grow this year.
Gross Written Premium grew by 26.56 percent to 1,024 million rupees with life insurance growing by 44 percent to reach 188 million rupees and General Insurance up 23 percent to achieve a premium income of 835 million rupees.

A company statement said total assets grew by 14.87 percent to reach 1,053 million rupees in 2008 as against 917 million rupees in 2007.

Prudent underwriting and improved investment income helped Amana Takaful Insurance to reduce its operating loss by 65.7 percent, the company said, without giving further details.

Amana Takaful Insurance chairman Tyeab Akbarally said they expect "significant growth" in the family Takaful business in 2009 and also from the medical insurance business.

"There is a lot of scope for medical insurance in Sri Lanka, given the high cost of quality residential medication."

Though the firm's investment income grew significantly, one of their main challenges remains to be the dearth of Islamic investment opportunities in the country, he also said.

"While conventional insurance companies in Sri Lanka largely benefit from the high returns on investment, as a Takaful operator, our investment opportunities are limited," Akbarally said.

"Islamic investment opportunities are still in their infancy in Sri Lanka."

The company said it is ranked among the top eight players in the General Insurance sector and ranked in ninth place in the Life Insurance sector in Sri Lanka.

The firm started in 1999 in collaboration with Takaful Malaysia, one of the largest Takaful operators in the world.

--lanka business online

RM25m target for Takaful's new fund

Takaful Malaysia hopes to rake in RM25 million from 100,000 investors this year through the sale of its newly-launched "Takaful myInvest" product.
This is the company's first regular contribution product or open-ended product targeting those who wish to diversify their investment portfolios while given insurance protection.

Takaful chief financial officer Azian Kassim said the company hoped to generate sales volume of RM800,000 during Malaysia Unit Trust Week (MSAM 2009).

"As this product is linked to the local equity and money markets, it is timely to launch this fund as most of the stocks are under-valued.

"Predictions show that the economy in the second half of the year will improve, which means the price of the fund is likely to increase."
The fund was launched by Prime Minister Datuk Seri Najib Razak at the MSAM 2009 in Plaza Angsana here yesterday.

"Takaful myInvest" allows investors to invest from as little as RM100 and gives them the choice to undertake from moderate to dynamic risk and returns from its four syariah-compliant investment funds.

They are Dividend (Irad), Blue Chips (Istifad), Index Tracker (Ihfaz) and Growth (Ittihad) funds.

For moderate-risk fund such as Irad, investors will not need to wait for the right time to invest as they are able to have consistent dividends from fundamentally sound companies, while Istifad allows investors capital appreciation during a good market run.

Azian said Takaful myInvest provided a constructive investment plan designed to act as an investment vehicle allowing investors to spread their savings while having the benefits of insurance protection. The funds are managed by the investment division of Takaful Malaysia.

Azian said the company was not worried about competition from similar funds in the market as those in existence were launched when the share prices were high.

"We started when the market is slowly picking up, which means better potential for growth and returns."

"Takaful myInvest" is open to individuals aged between 18 and 65.


Friday, April 17, 2009

Noor Takaful targets Dh1bn

By Shuchita Kapur
Noor Takaful aims to earn Dh1 billion as premiums in the next five years.

"We just started in the first quarter of this year but we target a 2.5 per cent market share in the next five years. This translates into Dh1 billion in premium," said Parvaiz Siddiq, the CEO of the company while talking to Emirates Business.

Currently, the company is focused on the UAE market but the CEO has not ruled out expansion and acquisitions overseas. "For the moment, we are looking just at our home market, which is the UAE, but if there is something very attractive we will also look at acquitions and expand outside the country," he said.

"In the future, we will probably look at the GCC as a market and any other country that offers attractive opportunities," he added.

To fund its ambitions, Siddiq looks at equity as an option. "We have enough money at this point and we'll raise capital as we go along," he said.

The company has also been saved from stock market losses. "We did not put any money in stock market. All the money is held with Islamic institutions at this point so in that case we were lucky,' he said.

Talking about the industry, Siddiq said conventional companies should be Shariah-compliant entities in the UAE.

"Why do we need a dual financial system? Why can't we have a single Islamic financial system and why do we need conventional financial firms here?" he asked.

Siddiq said Takaful has not had any major impact by the crisis. "There is a lot of premium that is available from conventional companies that will come to Takaful firms but they were also depending on the growth in the market to build their premiums and that has disappeared. About 10-15 per cent growth has fallen due to market conditions and this is a challenge," he said.


IGI Investment Bank and Pak Kuwait Takaful sign agreement

IGI Investment Bank, a part of IGI Financial Services signed a banctakaful agreement with Pak Kuwait Takaful Company Limited (PKTCL) for its upcoming insurance advisory service. According to this agreement, clients would be able to secure their future without compromising on their faith as PKTCL offers a host of Shariah Compliant general takaful & Islamic insurance products. IGI Investment Bank is now able to cater to clients seeking alternative of conventional insurance, a release said Wednesday.

Asia Pulse Data Source via COMTEX

Wednesday, April 15, 2009

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)

Global takaful market may hit $7.7 billion in 2012

The market for Islamic insurance, or takaful, may hit $7.7 billion by 2012 as its products are offered to large untapped Muslim populations across the globe, according to a report released on Tuesday. Global takaful contributions rose to $3.4 billion in 2007 from $2.5 billion in 2006, with contributions in Saudi Arabia and Malaysia, the two largest takaful markets, totalling $1.7 billion and $797 billion in 2007 respectively, consulting firm Ernst & Young said in the report.

"Takaful markets now span much of the globe but there still exists a large, expanding and untapped Muslim population on almost every continent," said Sameer Abdi, head of the company's Islamic Finance Services Group.

Compared to the reported losses of almost $350 billion of conventional insurers and government-supported enterprises in the United States, Europe and Asia, the takaful market has shown resilience in the global economic crisis, the report said.

However, major takaful operators saw a decline in the returns-on-equity in the last quarter of 2008.

"A young population in core takaful markets will need more coverage as government subsidies decrease and more families require private coverage," the report said.

"Regulatory support and framework, insurance legislation and compulsory coverage will facilitate its growth in the medium term."

The Gulf Arab States, Malaysia and Sudan are the top three takaful markets while the Indian subcontinent, Indonesia, Egypt and Turkey remain the least penetrated Muslim markets, Ernst & Young said.


Lloyd's of London eyes Islamic reinsurance

By Cecilia Valente
Lloyd's of London is setting up an Islamic re-insurance syndicate with a capacity of up to 200 million pounds to write Islamic compliant reinsurance globally, a PriceWaterhouseCoopers executive said on Tuesday.

Mohammad Khan, director for Islamic insurance, or takaful, at PwC, said the Lloyd's syndicate would include mainly financial institutions and to a lesser extent individual investors. It would become operational between the end of 2009 and the beginning of next year.

Financial consultant and accounting firm PwC is advising the financial group on the syndicate, he said at the Reuters Islamic Banking and Finance Summit in London.

Lloyd's of London was not immediately available to comment.

Islamic insurance is a tiny industry in Europe despite a 20-million strong Muslim population. Its development, and the growth of takaful more widely, will rely to a large extent on the strengthening of Islamic compliant re-insurance, Khan said.

Khan said the first Lloyd's syndicate would inevitably pave the way for more, bringing liquidity to the market for insurance which complies with Sharia law.

"Once you get one syndicate you get others, that is not a problem. The Lloyd's model is about sharing (risks and rewards). If you think about it, the model lends itself quite neatly to Sharia because it is mutual," he said.

Lloyd's has been here before. In 2006 Lloyd's insurer Creechurch Underwriting Limited announced the formation of a syndicate to be managed in accordance with Islamic principles, but Khan said no business was written, because the insurer was subsequently taken over.

Khan said the new syndicate would raise between 50 million and 200 million pounds.

"I do not think Lloyd's is just looking at one (syndicate), it would not make sense... Lloyd's is quite serious about this," 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.

Takaful investment strategies must also abide by Sharia law, which excludes sectors like alcohol as well as instruments such as interest bearing investments or over-leveraged companies.

At the session of the Reuters Islamic Finance Summit in Dubai, Noor Takaful's managing director Ahmed al-Jana said the emerging industry could grow at 30-40 percent annually in the next three to five years as more people switch from conventional to Islamic insurance.

Noor Takaful is a unit of Dubai's Noor Islamic Bank.

--LONDON (Reuters)

Pak-Qatar Family General Takaful posts Rs170m profit

The Pak-Qatar Family/General Takaful posted gross revenue of Rs170m for the year ended December 31, 2008.

Speaking at the third Annual General Meeting to review the company’s performance and evaluate the financial results, Sheikh AIi bin Abdullah Al Thani, Chairman of Pak-Qatar Family Takaful Limited, said: “Despite tough global economical conditions and its impact on Pakistan, the company witnessed substantial growth in all areas of operations in 2008 in addition to establishing offices in 10 major cities of the country.”

In Individual Family Takaful segment, the company has developed a strong agency structure with manpower of approximately 700 trained Takaful consultants.

“This growth is unprecedented in the country since no other Takaful/lnsurance company could attain this within its first year of operations,” he said.

The company has launched various products designed to meet the needs of various segments of the market and the company now has the capability to launch new products and services driven by the consumer needs.

After laying a strong foundation through a committed and professional management team together with the implementation of state-of-the-art business system, the company is focusing on strengthening the individual family takaful business, which is very important for the long term survival and growth of the company, Sheikh AIi bin Abdullah said.

“Significant progress was also made to acquire corporate business. A number of respectable institutions entrusted us for their employee benefit plans and the client list is growing,” he said.

“During 2009, we will continue to tap the huge untapped potential of the Takaful market in Pakistan. During this process we will be aggressively pursuing our goal of spreading takaful protection among the masses with the enhanced zeal and impetus.”

He added that in 2008 growth was achieved without any spending on advertisement and the management did a good job to make the company’s presence felt in the market as well as among competitors. “But now is the time to support management with advertisement and sales promotions. We will be making a corporate launch of the company in the 2nd quarter of this year,” Sheikh Ali bin Abdullah said.


Friday, April 10, 2009

Bank launches ‘happy deals’

Bank Malaysia Berhad recently launched its “HSBC Happy Deals” campaign which offer special savings and promotions on its consumer banking products.

“The campaign was developed with the needs of our customers in mind and how we can help them during this challenging time,” said HSBC Bank personal financial services general manager Lim Eng Seong.

Lim said the campaign was drawn up using research done by Synovate with 6,500 interviews conducted across nine countries, including Malaysia, last year.

“The research indicated that Malaysians have changed their behaviour with respect to how they handle their money. They are shopping more wisely with 49% saying they are more conscious about the prices of the goods they buy and what they take home.

“They are always looking for ways to make their money work harder,” he said, adding that with Happy Deals, customers will have the opportunity to enjoy greater savings.

The “HSBC Happy Deals” campaign features products including home loans, personal loans, Takaful products and foreign currency deposits. The offers are packaged with related products for better value.

“For example, customers who subscribe to our HomeSmart or HomeSmart-i can save up to RM65,000 in interest and get coverage up to RM100,000 of Household Contents Shield for free, when they take up our packaged products,” he explained.

Among the offers is a promotional rate of up to 50% of Front End Load (FEL) fees, 50% off Takaful PA Shield for first year, and up to 2.5% above board rate, among others, for customers looking for investment, protection and foreign currency plans upon subscription to respective packages offered in the campaign.

Customers who sign up for any of “HSBC Happy Deals” products during the promotion period will receive a cash voucher worth RM120 to redeem for HSBC’s Will Writing Service. The voucher is made available to customers on a first-come-first-served basis while stocks last.

Meanwhile, customers who take up personal loans, can also enjoy up to 1% off profit rate, if they sign-up for the Anytime Money packages.

“The campaign gives flexibility to plan for your finance. It is a powerful product, a powerful feature,” said Lim.

The campaign ends on May 15.

Lim said the bank which expects a 15% growth overall from the campaign, in terms of loan and investment, will continue to roll out more initiatives in the future despite the current financial crisis, as it is “gearing up” for the challenge.

For more information, visit any HSBC Bank or HSBC Amanah branch, log on to
www.hsbc.com.my, or visit the HSBC Amanah Carnival at HSBC Amanah Malaysia’s latest branch in Ampang Point next weekend (April 18 and 19).


Exim Bank sees drop in trade financing

Export-Import Bank of Malaysia Bhd (Exim Bank) expects its trade financing volume to shrink by 20% this year in line with the slump in global trade.

The government-owned bank recorded RM1bil in trade financing last year.

Managing director and chief executive officer Mohd Fauzi Rahmat said the slowdown would, however, not stop the bank from continuing to support Malaysian companies as he believed there were still healthy markets amid the challenging economic climate.

“The world’s trade value is forecast at US$13 trillion this year, although the number can be disputed as some trade is unrecorded.

From left: Datuk Mohamed Azahari Kamil, Asian Finance Bank director Fuad Kayeel Saeed, Takaful Malaysia chairman Tan Sri Dr Hadenan Abdul Jalil, Exim Bank chairman Datuk Mohd Hashim Hassan and Mohd Fauzi Rahmat after the signing

“Import and export activities are still strong in Asia, Europe and upcoming markets such as the Middle East,” he told reporters after the signing ceremony with Asian Finance Bank Bhd to part finance Exim Bank’s acquisition of Darul Takaful building via a murabahah term financing of RM55mil. The balance of financing the RM63mil building will be via internal funds.

According to the World Trade Organisation, the global export volume was expected to contract about 9% this year, the steepest dive since World War II.

Fauzi said all banks in Malaysia needed to be supportive of trade as it was the lifeline of the country’s survival.

“In the 1997 Asian financial crisis, trade was the primary factor that pulled us through the difficult period. And Malaysian companies should venture out of the local market due to the slowdown experienced here,” he said.

Asian Finance Bank chief executive officer Datuk Mohamed Azahari Kamil said trade financing demand had been on the uptrend recently due to more small and medium enterprises penetrating the international market.

“Furthermore, the lack of confidence between manufacturers and buyers (in such economic uncertainty) also boosts the volume of trade financing which provides better trading security (insurance),” he said.

Despite the expected fall in trade financing volume, Fauzi said Exim Bank should approve more loans this year. It approved RM300mil loans in the first quarter compared with a total of RM850mil last year.

“We are expanding quite fast in the Middle East market, especially in construction,” he said, adding that the bank’s exposure was mainly in Asia and the Middle East.

Fauzi said Exim Bank, which introduced Islamic financing last month, would continue to produce more related products in the future.

“We are working on one or two Islamic financing products this year and Islamic financing will be our key performance indicator for the next three to five years,” he said.

Exim Bank intends to make the 18-storey Darul Takaful building, which currently has Bank Islam Malaysia Bhd as its anchor tenant, its new headquarters in 2011.

--The Staronline

Monday, April 6, 2009

Amana Takaful Insurance covers the world's leading eco-lodge

In a show of support to Sri Lanka's resilient tourism sector, Amana Takaful Insurance has offered a comprehensive insurance plan for KumbukRiver, the Sri Lankan eco resort which just created history by being crowned the world's leading eco-lodge at the World Travel Awards.

"KumbukRiver put Sri Lanka on the global map for all the right reasons and at a trying time for the local tourism industry. We thought it would be a good gesture to protect this eco resort which has brought unprecedented fame to the country", said Mr.Reyaz Jeffrey, CEO/CMO- Amana Takaful Life.

"It is not every day that Sri Lanka produces a world-class brand and it is just the kind of endorsement Sri Lankan tourism needed. Amana Takaful Insurance is about partnerships that take care of one another, bringing home to Sri Lanka a revolutionary insurance product hailed as the world's most rewarding concept of insurance. So we thought of extending our goodwill to a home-grown brand which has made Sri Lanka proud," he said.

In a special insurance package tailor-made for KumbukRiver's challenging and unique operation in an idyllic yet far-flung location in Buttala, Amana Takaful Insurance now covers its property, employees, as well as, visitors - both international and local tourists in search of a unique travel experience. The 14-acre responsible tourism initiative on the banks of Kumbukkan Oya, features among its facilities a uniquely designed villa in the shape of a 40ft elephant.

"It's a wonderful gesture by Amana Takaful Insurance to make a commitment to an enterprise which has beaten the odds in pushing Sri Lanka in the right direction. KumbukRiver is a pioneering venture and serves as a watchdog in the conservation of the area's bio-diversity, especially considering its close proximity to Yala. It's a magnificent gesture when a Sri Lankan corporate volunteers its support; so we can continue to preserve this international destination", says Mr. Dinesh Watawana, Managing Director of the resort which won the travel Oscar.

"Our quest is not just about business but to be the Sri Lankan flag-bearer of a world-class concept and carry that message to the people by also being part of what matters to the country and its people," adds Mr. Jeffrey.

--The Sunday Times

SALAMA’s gross written premium spurts 42% to touch AED 1.3 bn

SALAMA-Islamic Arab Insurance Co. (PSC), one of the region’s leading Islamic insurance (Takaful) companies, has announced an impressive 42 per cent increase in its gross written premium for 2008.

The Board of Directors of SALAMA announced that its gross written premium for year ending December 31, 2008 touched AED 1.326 billion as against AED 933 billion in 2007 with a healthy 42% growth.

The company, which is the largest Takaful and Re-Takaful operator in the world, also announced that its underwriting income registered a remarkable 39 per cent increase to AED 164 million in 2008, compared to AED 118 million in the previous year.

“The achieved growth in our written premium is the result of our dedicated continuous work to prove once again that SALAMA is the leader in Takaful and Re-Takaful companies worldwide and is among the best Islamic insurance companies, therefore we strive to keep up with our good performance as this increase will leave us with more responsibilities towards investors” said Dr. Saleh Malaikah, Vice Chairman & CEO of SALAMA.

“The extraordinary results achieved by SALAMA amidst the global economic turbulence further reinforce our company’s growth trajectory and strong fundamentals. We have achieved a strong performance because of our prudent investment policies, corrective measures on a timely basis and presence in strategic markets which are not exposed to the economic crisis. Our strategy focuses on building the Takaful and re-Takaful business portfolio and improving our written premium and underwriting standards,” said Mr. Rafiq Halani, General Manager – General & Health Takaful at SALAMA.

In his comments, Mr. Noel D’Mello, General Manager – Family Takaful, said: “The financial growth achieved in our written premium is a reflection of the strength and quality of our Takaful and Re-Takaful products and services. SALAMA has already carved a niche for itself in the Islamic insurance sector and has maintained a very high “A-” rating from AM Best and “BBB+” by S&P, which augurs well for its growth across the GCC and beyond, especially in the changed economic milieu.”

The company was nominated for Best Takaful Operator and Best Banca Takaful Operator at the ‘Islamic Business & Finance Awards 2008 by CPI Financial. It has a paid-up capital of US $300 million and is listed at the Dubai Financial Market.

SALAMA has a solid business profile in their traditional territories -- Far East, Africa, Middle East and Central Asia, which is further improving with geographical expansion, business growth and introduction of new life lines.

--Al Bawaba

Saturday, April 4, 2009

Hong Leong Tokio Marine Takaful Launches Education Savings Scheme

Hong Leong Tokio Marine Takaful Berhad (HLTM Takaful) has launched its "HLTMT i-Grad" scheme, a long-term education savings scheme, to help finance children's education expenses while providing protection.

Under the scheme, parents will have to pay as from RM70 a month while they will be given the flexibility to determine when the scheme matures -- when the child reaches 19, 21, 23 or 25 years, said Chief Executive Officer Abdul Latiff Abu Bakar.

"We believe access to education can be assured through a scheme that has the family's interests at its core and we keep the contributions low so that parents are not unnecessarily burdened and provide the added benefit of protection.

"The new scheme allows parents to save for their child's education, leaving them with enough room to provide for the rest of their family needs," he said in a statement.

Abdul Latiff also said the scheme will provide back-to-school benefits, whereby a child is entitled to RM100 a year at the start of every school term from age 8 to 18, and reward exam benefits to i-Grad participants for excellent academic achievements.

"Children covered under this scheme will have an additional layer of protection via pay or benefits rider and in the event of death or disability of their parents, the child will still be protected while payments of further installments will be waived," he added.


Brand helps STMB stay focused on CR goals


So immersed is Syarikat Takaful Malaysia Bhd (STMB) in helping to improve the lives of the underprivileged that it has a brand dedicated to this corporate responsibility (CR) programme, called TakafulmyJalinan.

Group managing director Datuk Hassan Kamil says having a brand allows the company to be more focused in achieving its CR-related goals.

“Most companies carry out their CR activities on an ad hoc basis or as separate activities unrelated to one another but we feel that by having a brand, each activity is better implemented and proves more sustainable,” he tells StarBizWeek.

“It also helps us better communicate CR to the public,” Hassan adds.

Formally launched in January, TakafulmyJalinan acts as an umbrella brand to represent categories of CR activities undertaken by STMB. Two sub-brands – myJalinan~Ilmu and myJalinan~Kasih – address issues related to children’s education and poverty respectively.

Under myJalinan~Ilmu, STMB intends to “adopt” primary schools in rural areas of the country to improve their quality of education.

STMB is no stranger to helping needy schools. Under the Government-initiated Pintar Programme, it adopted Sekolah Kebangsaan Permatang Binjai in March 2007.

The school is located in a rural area in Penang where most of the students come from low-income families.

“We want to improve the quality of education at the school. Apart from financial assistance, we have donated books and computers,” Hassan says, adding that STMB aims to lend a helping hand to more rural schools.

On how STMB selects the schools, Hassan says: “We have people all over Malaysia. They will submit the names to us and we will make the final assessment on whether they are truly deserving.”

The myJalinan~Kasih sub-brand sees STMB providing assistance to groups of individuals such as orphans. Hassan says STMB intends to help at least one orphanage a month.

“We have given monetary assistance to five orphanages since the launch of our CR brand. We personally visit the orphanages to ensure that they deserve assistance,” he says, adding that STMB has also donated furniture and clothing to the orphanages.

In addition, single mothers and the destitute are also targeted under myJalinan~Kasih, according to Hassan.

“Before we choose the mothers, we look into the person’s background such as her monthly income. We go through bodies like Social Welfare Department to get their names. We then filter and screen them to know which ones are deserving.

“We also help other individuals who are in dire straits. These may include the children of the single mothers.”

Going forward, Hassan says STMB is in the midst of launching a new sub-brand called myJalinan~Alam that will focus on activities related to the environment. “This will include educating children on the importance of preserving the environment,” he says.

Hassan says that RM500,000 has been disbursed to deserving recipients since the launch of TakafulmyJalinan.

“We have set aside another RM500,000 for the next few months. Despite the current economic situation, we have no intention of cutting back on our CR efforts.

“We also strongly believe that care and assistance should not be placed solely in the hands of the Government. Every individual and organisation should play a role in helping those in need,” he says.

Hassan adds that as a company carrying out a business governed by syariah principles and Islamic fundamentals, it is an obligation for STMB to assist the underprivileged.

“This is part of our social obligation as a takaful company. In Islam, as an individual you must pay zakat if you have an asset or income. The same applies to corporate entities.”


Wednesday, April 1, 2009

Aspects of (re)takaful insurance require special rating consideration

(Re)takaful insurance has grown from a niche product to a mainstream risk management offering and Standard & Poor’s (S&P’s) has identified aspects of the business model that may be subject to specific consideration or special treatment in its financial strength analysis.
Some of these aspects include industry and economic risk, competitive position, earnings quality and capital adequacy, according to S&P’s report, Standard & Poor’s Approach to Rating Takaful and Retakaful (Islamic Re/Insurance) Companies.
When considering industry and economic risk, S&P’s may adapt its assessment to reflect the likely potential demand for Islamic insurance in the operational domicile.
“For instance, we believe that countries with a large Islamic community are likely to have stronger economic/business drivers than where the Islamic population is smaller,” S&P’s said in its report.
In terms of competitive position, as Islamic entities, takaful companies’ income streams can be constrained by the application of strict Sharia compliance to the nature of the risks being offered, S&P’s said.
“We understand that in some circumstances, the risks accepted will be broken down into Sharia compliant and non-compliant components, with any profits from the latter being donated to charity, or eliminated in some form,” the report said.
The assessment of earnings quality can be more complex for takaful companies than for other companies because the reporting of financial statements for takaful fund members and shareholders is often separate, S&P’s continues.
“At the technical level, therefore, we consider that underwriting earnings may be expected to be more marginal in terms of profit contribution over the long term, as members may expect lower risk pricing on this shared risk basis, or a profit share distribution at some point from any surpluses.”
For capital adequacy, S&P’s generally uses its risk-based capital adequacy model to assess the capital quality of the company. For (re)takaful companies, the key adaptation is to offset any takaful fund deficit against the shareholders’ capital in S&P’s analysis, as shareholders are obliged to offer support for any such shortfalls.
Similarly, S&P’s will generally include any takaful fund surplus as part of the capital base.


Firm donates RM400,000 to charity homes

DESPITE the current world economic situation, Syarikat Takaful Malaysia Berhad (STMB) continued with its corporate social responsibility of helping the needy.

Its newly launched Takaful myJalinan donated RM400,000 to four homes for the underprivileged in Selangor recently.

The recipients were Rumah Harapan Al-Khaadem (Home of Hope), Rumah Kebajikan Siti Khadijah, Rumah Anak Yatim Darul Izzah and Pusat Nur Hikmah.

The donation ceremony was held at the Home of Hope in Shah Alam with about 50 children from the homes and their guardians and representatives present.

STMB chairman Tan Sri Dr Hadenan Abdul Jalil gave away the donations to the homes’ representatives recently.

Also present were STMB group managing director Datuk Hassan Kamil and Home of Hope patron Tan Sri Desa Pachee.

Thanking STMB for its sincerity and support, Desa said the monetary assistance would go a long way to help the home and provide for the children.

Wheelchair-bound Norhidayah Mat Arif, 13, who lost both legs in a fire several years ago, was among those who witnessed the presentation.

Norhidayah is now being cared for by her blind mother.

Hadenan said the company recognises the need for concerted efforts by the public sector, corporate bodies and the public to undertake social-related programmes to alleviate the difficulties faced by the underprivileged.

"We hope Takaful myJalinan will continue to contribute significantly to strengthening the Social Safety Net initiated and advocated by the government," he added.


Muslim world urged to promote Islamic banking

RAWALPINDI: The Muslim countries should promote Islamic banking, as its basic aim was not to make money at the cost of people but to play an effective role in eliminating interest.

This was said by speakers in a seminar on “Islamic banking and Takaful” held at Fatima Jinnah Women University here on Tuesday.

Al-Huda Center of Islamic Banking and Economics organized the seminar in collaboration with Pak-Kuwait Takaful Company.

Abdul Wadood Khan, a senior scholar, was guest speaker on the occasion.

Khan highlighted various aspects of conventional banking in the light of Islamic teachings.

“Loan is an indispensable need of mankind. Trade, industry, governments and welfare organizations very frequently and rich persons occasionally need loans, but the loan lending should be free of interest. Islam prohibits interest and highly recommends interest-free loan,” he said.

Pak Kuwait Takaful Company representative Adnan Akhtar briefed the participants about Takaful, an Islamic way of insurance.

He said Takaful was based on mutual contribution to furthering good by helping others in need.

He said Pak-Kuwait Takaful was the first Islamic insurance company in Pakistan that believed in promoting the cause of Takaful as well as of insurance business all over the country.

Islamic Relief Fund representative Shazia Hassan also spoke on the occasion and highlighted the concept of Islamic banking.

The seminar was followed by a question-answer session. In the end, certificates were also awarded to the speakers and organizers of the seminar. Staff Report
--Daily Times