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.

--NewStraitsTimes

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.

--Business24/7

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

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.

--Business24/7

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.

--THE PENINSULA

Bank launches ‘happy deals’

HSBC 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).

--Sun2Surf

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

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

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.

-- BERNAMA

Brand helps STMB stay focused on CR goals

By EUGENE MAHALINGAM

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.”

--Thestaronline

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.

--Canadianunderwriter

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.

--Sun2Surf

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

Gambia: Takaful Opens New Branch in Farafenni

Alhagie Babou Jallow
The governor of North Bank region, Mr Edward Seckan, recently inaugurated a new branch of Takaful Insurance Company in Farafenni.

Speaking at the ceremony, Governor Seckan called on the people of his region to join the Takaful Insurance Company Limited. He said that in modern day economy, insurance has been recognised as essential tool which will help in the growth and development of a nation.

Governor Seckan said The Gambia is a predominant muslim country and speculations about conventional insurance in The Gambia, will become a thing of the pass. He called on the people of his region to support Takaful Gambia as it is in accordance with Islam. He noted that this insurance which is 95% owned and managed by Gambians is a move in the right direction and a pride to government.

For his part, the chief of Sabah Sanjal, Mam Biran Gaye, noted that Takaful Insurance's consistance with commitment and promotion of Islamic financing is laudable, following the successful establishment of Islamic Banking in The Gambia. He called on his people to patronise the insurance company.

For his part, the managing director of Takaful Insurance Company Gambia Limited, Modou Joof, who is a native of Farafenni, said Takaful Gambia has been incorporated in October 1st 2007, as the first Islamic insurance company in The Gambia and commenced business operation from Thursday 24 January, 2008 under the relevant laws of The Gambia.

He said, Takaful as a business venture is based on Islamic profit-sharing principle of 'Mudabah'. "In this regard, clients of Takaful shall be entitled to earn from contributions paid in consideration for the term of participation in Takaful provided by Takaful, subjected to the declaration of profit by Takaful Gambia Limited," he said. This he said, will certainly give a special added advantage to the insuring public that has never been available.

--allAfrica.com

Takaful disposing KL property to Exim Bank

PETALING JAYA: Islamic insurance company Syarikat Takaful Malaysia Bhd is disposing an 18-storey building in downtown Kuala Lumpur to Export-Import Bank of Malaysia Bhd (Exim Bank) for RM63 million.

In an announcement to Bursa Malaysia Friday, Takaful Malaysia said the sale would unlock gains of RM543,000 and allow the company to focus on its principal activities of managing family and general takaful businesses.

According to details in the announcement, the 20-year old building has a total lettable area of 99,021 sq ft and is almost fully occupied.

The current monthly rental income is RM386,176 or an average rental rate of RM3.92 per sq ft.

--thestaronline

Can Islamic banks save the world?

Islamic banking could help Europe and the world survive the global financial crisis, a leading spokesman has said.

Dr Ahmed Mohamed Ali, president of the Islamic Development Bank (IDB), said that stabilising global markets is a priority for East and West alike.

He told bankers and financiers at Mansion House that a principle of Sharia law is that money should measure rather than create value.

And he noted that Islamic banks control £720 billion worldwide, have grown by 10% to 15% growth in the past few years and already have close ties with London.

Meanwhile, efforts by UKTI and other Government agencies to nurture Islamic banking are recognised by the Top 500 Islamic Financial Institutions report, which rates the UK as the number-one western destination for Islamic finance.

Dr Ahmed Mohamed said that the global crisis makes it “even more vital for policy interventions to promote financial inclusion and enhance access of the poor to financial services.”

UKTI Islamic Finance specialist Richard Thomas said: “The principles underpinning Islamic finance have seen it relatively unscathed by the global financial crisis, and there is also much information to share on international financial stability.”

The Lord Mayor of the City of London, Ian Luder, said: “The growing partnership between London and financial centres across the Muslim world shows the importance of the sector in assisting the world's many Muslims to engage with the global financial system in ways compatible with their faith, particularly at this time of global economic downturn.

--ukinvest

Market volatility to affect financial sector

Banks will find it challenging to sustain revenue base

THE domestic financial sector is bracing for greater challenges in 2009 due to moderating economic growth and volatility in financial markets.

Sustained risk aversion may result in continued low trading liquidity in specific asset classes. Credit spreads in the corporate bond market may widen further, resulting in higher cost of funding.

Furthermore, corporate earnings have started to decline and weaker employment prospects could translate into broad-based increases in delinquencies and fraud, triggering a credit cycle downturn.

As credit outlook weakens and demand for financing, financial products and insurance protection moderates, Malaysian financial insititutions will face significant challenges in sustaining their revenue base.

Banking institutions will need to balance prudent standards and provide continued support to customers, particularly in easing temporary cash flow pressures.

Counter-cyclical practices will only exacerbate the economic conditions, which will in turn impact the bank’s balance sheet.

Meanwhile, domestic financial groups with regional operations will not only see lower profit contributions, but face new channels of risk transmission.

Nonetheless, revenue contribution from overseas remained small, at 11% of the banking system’s pre-tax profit.

Financial groups with foreign partners, however, have benefited in terms of increased sophistication in risk management capabilities and technology.

Similarly, the Malaysian insurance and takaful sector will also be affected by lower demand and higher competition.

In particular, the expected decline in vehicle sales will negatively impact the motor insurance and takaful business, which constitutes 45% of gross premium in 2008.

Premiums are also likely to be affected by the potential increase in surrender rates and lower sum insured. Claims are projected to intensify due to higher incidences of theft and fraud, as well as due to maintenance faults.

To face the rising challenges, Bank Negara has increased its supervisory and surveillance capacity to detect potential problems at an early phase and allow for pre-emptive actions.

While structural changes in the global and domestic financial landscapes have increased the complexity and inter-linkages in the financial system, Bank Negara closely engages other central banks, monetary authorities and supervisory agencies to monitor and respond, when necessary, in a coordinated manner.

Moving forward, macroeconomic surveillance and supervisory activities will continue to focus on several key areas:

Strengthening the robustness of risk transmission assessments from external developments to the local financial market, businesses, households and financial sectors, as well as spillovers of distress from non-regulated entities and markets;

Enhancing ongoing scenario analyses at both the system and individual institution levels;

Strengthening engagement and communication with various stakeholders including regulatees, business associations, small and medium enterprises (SMEs) and other regulatory authorities to enable early identification of signs of distress and emerging risks. This include ensuring continued access to financing;

Ensuring pre-emptive action plans are in place and implemented in effective manner; and

Intensifying regional and international cooperation and coordination in supervisory and regulatory activities.

--the star online

Assets Of Financial System Increase To RM2.58 Trillion

The assets of the financial system in the country at end-2008 increased to RM2.58 trillion from RM2.476 trillion at end-2007.

The banking system, which includes Islamic banks, registered pre-tax profit of RM19.17 billion last year, up from RM17.701 billion in 2007, according to Bank Negara Malaysia (BNM) in its Financial Stability and Payment Systems Report released here today.

The 2008 figures are preliminary figures.

BNM said pre-tax profit for the commercial banks, which include finance companies and Islamic banks, increased to RM18.489 billion from RM15.655 billion previously.

The economic slowdown adversely affected the investment banks as their pre-tax profit dropped to RM681.1 million from RM2.046 billion previously.

Meanwhile, pre-tax profits of the Islamic banking system, excluding one Islamic bank that made exceptional loss, fell to RM1.810 billion from RM1.894 billion.

The report said the number of financial institutions in the banking system rose to 54 last year from 47 in 2007, mainly because of the increases in Islamic banks (to 17 from 11) and investment banks (to 15 from 14).

The number of people employed in the banking sector rose to 114,856 in 2008 from 109,641 in 2007, with the bulk of them in commercial banks (up to 99,593 from 96,146).

On the life insurance sector, the report said, the industry's total income fell to RM26.779 billion last year from RM28.440 billion in 2007, while its outgo increased to RM19.238 billion from RM14.617 billion.

It said the general insurance sector's operating profit fell to RM588.9 million in 2008 from RM1.339 billion in 2007.

Maenwhile, the family takaful income rose to RM2.834 billion from RM2.376 billion, while outgo rose to RM1.294 billion from RM1.441 billion.

The general takaful operating profit rose to RM171.6 million from RM24.5 million.

-- BERNAMA

4th Asian Takaful Conference promoted by Aarkstore Enterprise

Takaful seems to have become a fundamental part of the insurance landscape and is growing from strength to strength, within the region and internationally with more players sprouting up even in the West and North America.

With the global financial crisis raging, Islamic finance seems to have been relatively unscathed. Takaful still remains a viable option, if not a more attractive option now for both Islamic as well as conventional clients. Asia Insurance Review, therefore together with our Lead Sponsor B.E.S.T Re is putting together the next Asian Takaful Conference this year to address the challengesand opportunities facing takaful in the current global financial crisis. The conference, supported by International Cooperative and Mutual Insurance Federation (ICMIF) & the International Insurance and Takaful Companies Federation (FIITC) will look at the theme, "The New Takaful Landscape in the Current Global Financial Crisis".

However, takaful players together with regulators and rating agencies must remain vigilant to ensure that proper risk management practices are in place to determine solvency and capital requirements.

The 4th Takaful Conference will look at issues that affect the Takaful industry in this current financial crisis �' the growth potential, corporate governance, maintaining solvency, the role of regulators in ensuring a balanced regulatory framework, and the operational and strategic challenges faced by takaful operators. There will be special panel discussions on issues like surplus distribution, as well as a comparison between how takaful is run in Asia and the Middle East. The conference will touch on the need to boost standards in the takaful world and offer real value to consumers while making sure the industry remains effi cient, competitive and compliant. There will be a sharing of success stories in the arena as well as the factors limiting the growth of takaful and retakaful.

Sign up today for this important event to learn from the leaders and to find out how to sharpen the edge of your takaful business and how to make it a serious platform for success. The conference is expected to attract takaful as well as conventional companies from around Asia including insurance and reinsurance companies, Islamic banking institutions, regulators, Shariah scholars, consultants, brokers as well as service providers keen to tap the potential of the takaful market. We hope to see you in Singapore.

Who Should Attend

* Life & General Insurance & Reinsurance Companies (both Takaful and Conventional)
* Takaful Companies and those providing Takaful insurance services
* Islamic Banking Institutions & Islamic Finance Players
* Regulators
* Shariah Scholars
* Management Consultants
* Reinsurance & Insurance Brokers
* Service Providers to the Takaful industry, ie lawyers, technology companies, loss adjusters, etc.

--pr-inside

Bailout Fallout: Uncle Sam's Sharia Board

By Diana West :
At your service, American Taxpayer! AIG's Shariah Advisory Board. Meet Moe, Larry and Curly. I mean, Mohamed, Muhammad, and Mohammed.* As members of the AIG Takaful Shariah Advisory Board, they really work for you and me, the American taxpayer, ever since we the people bought an 80 percent stake in the bankrupt insurance company.

How's that for bait and switch? While we agonize over chump-change AIG bonuses, we ignore the fact we're paying for the subversion of liberty and justice for all by funding AIG's promotion and entrenchment of sharia--Jew-, Christian-, and humanist-hostile supremacist Islamic law. As of December 2008, by the way, AIG Takaful insurance products went on sale in the USA under the ironically named Lexington Takaful Solutions.

Lexington, Lexington--wasn't that where our experiment in liberty began with the shot heard round the world? Must have been a dream. At this rate, Lexington will go down in history as the beachhead of US taxpayer-funded sharia. From "taxation without representation" to taxation to support sharia: How the free have enslaved themselves.

But back to the Sharia team on Unlce Sam's payroll.

Mohamed #1 is Mohamed Ali Elgari, born Makkah, Saudi Arabia. The AIG Takaful website boasts that he's the winner of "the Islamic Development Bank prize in Islamic Banking and Finance for the year 1424H."

1424H? That's 2004 for infidels. (Do the Islamic math here.)

Someday, we'll consider Elgari's career trajectory typical. That is, where once our elites went from say, Groton to Yale College to Harvard Law School, now, pace Elgari, they go from from King Abdulaziz University in Saudi Arabia to the OIC to Harvard Law School. There, not far from the statue of John Harvard, the crews rowing on the Charles, and, of course, Harvard Yard, the Saudi sits on "the advisory board of Harvard Series in Islamic Law."

In other words, the cancerous advance of sharia into our institutional organs has already reached a critical stage.

Read about the rest of AIG's Sharia Team here.

Note that Muhammad #2's bio, first crack out of the box, informs us that he is the son of "justice (Retd) Mufti Muhammad Taqi Usmani." Papa Usmani is indeed a world-noted and prolific sharia scholar, whose works include the book Islam and Modernism where he wrote: “Killing is to continue until the unbelievers pay jizyah (subjugation tax) after they are humbled or overpowered.”

Don't ask me why AIG thinks that's a irresistible sales pitch for life insurance.

Paul Sperry reports on Usmani the Elder and his jihadist activities--and his abrupt disappearance in 2008 from the Dow Jones sharia team after said jihadist activities began to be reported--here. Funny how proud of him AIG still is.

--EuropeNews

Insurance firms' business rises

Graham Morrall (SUPPLIED)
-By

Shveta Pathak
Corporates are getting increasingly interested in insurance products and firms involved in offering such products are witnessing a rise in the share of business from this segment, said a leading life insurance player.

"In spite of current economic problems, premiums – particularly on the corporate segment – have not declined. In fact, in case of corporate customers, it's the opposite," Graham Morrall, Regional Head of Distribution, Middle East and Africa, Zurich International Life (ZIL) told Emirates Business.

The region, with its low insurance penetration, mainly due to cultural reasons and awareness levels, held high potential for insurance industry, he said.

"In terms of number of new companies, or companies that are not our clients, enquiries have increased by over 50 per cent from levels in December. People are increasingly realising the need for protection. We have made significant stride in corporate business in the last three years in the Middle East. There are great opportunities here."

"The requirements for Takaful (Islamic insurance) are there and cater to the segment. We announced in November last year that we would get involved in Takaful market," he said.

He said insurance had become a major focus in the present economic scenario. "Protection has become a key focus for people. The economic crisis has hanged the outlook, people want to save more; they want to be protected."

Unlike many other businesses, particularly the financial sector, that were going through a tough phase, insurance renewals had not been affected, added Morrall.

He said the present economic crisis had led companies to focus on their core businesses.

ZIL, said Morrall, was making efforts to reach the untapped market by widening its network, strengthening the competence of its distributors.

--Business 24-7

Islamic funds’ asset growth likely to slow

The rate of asset growth of funds in Islamic financial institutions this year is expected to be slower than in 2008, says Kuwait Finance House (M) Bhd managing director Datuk K. Salman Younis.

He said this was due to the prevailing global economic downturn but added that long-term recovery was certain.

“We believe asset growth of Islamic funds will be back to its strong level once the global economy improves,” he said at the Dow Jones Islamic Market Indexes media briefing yesterday.

Salman said there was huge potential for Malaysia to be the leading Islamic financial hub in the region and for Islamic financing to be the country’s key pillar of growth.

According to The Banker, a global financing intelligence magazine, the top 500 Islamic financial institutions charted a 27.6% asset growth to US$639.1bil in 2008 compared with US$500.1bil the previous year.

The major contributors to asset growth for Islamic funds are Gulf Cooperation Council (GCC) countries (US$262.7bil); Asia (US$67.1bil), led by Malaysia; Australia/Europe/the United States (US$35.3bil); and non-GCC Middle East countries, Middle East and North Africa (US$248.3bil).

PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director (Islamic financial services practice) Jennifer Chang concurred with Salman’s view on Malaysia’s potential as the region’s Islamic financial hub.

For instance, she said, Malaysia’s takaful industry had doubled in asset size over the last five years and its penetration rate was expected to reach 20% by 2010, compared with 6.5% currently.

She added that Malaysia was the largest player with 20% share of the global takaful business worth US$4bil.

Chang also said that as at end-November 2008, there were 149 Islamic funds domicled and managed in Malaysia, compared with 131 in Saudi Arabia.

“This is despite Malaysia’s total Islamic assets under management being only US$4.64bil, compared with Saudi Arabia at US$13.9bil for the period under review,” she said.

As at April 2008, the total Islamic assets under management worldwide is believed to be US$33.9bil.

--The Star Online

Allianz Takaful enters Bahrain

Insurance giant Allianz has entered the GCC market offering Sharia-compliant products and services.

Allianz Takaful, to be based in Bahrain, was launched during a ceremony attended by Central Bank of Bahrain governor Rasheed Al Maraj at Ritz-Carlton Bahrain Hotel and Spa.

The event was also attended by German Ambassador Dr Hubert Lang, Allianz Takaful chairman Heinz Dollberg, chief executive Dr Abdul Rahman Khalil Tolefat and other dignitaries from the financial sector.

'We will combine Allianz's global trust and expertise, and our local insights to create financial solutions of world-class standards,' Dr Tolefat.

-TradeArabia News Service

Ratings Recap: Wing Lung, Sagicor, Empyrean Re, ARIG/Takaful, Exchange

A.M. Best Co. has downgraded the financial strength rating to 'B++' (Good) from 'A-' (Excellent) and the issuer credit rating to "bbb+" from "a-" of Hong Kong's Wing Lung Insurance Company Limited (WLI). The outlook for both ratings is stable. Best said the "ratings reflect the company's solid business profile and liquid investment portfolio. WLI has established a stable market presence in the Hong Kong general insurance market. In 2007, the company was ranked ninth in the local market with a market share of 2.7 percent by gross premiums written. WLI remained the second largest participant in the general liability market, representing approximately 8 percent of market share." Best also noted that "WLI maintained a liquid investment position by holding approximately 77.2 percent of total invested assets in cash and fixed income securities as of September 2008. Going forward, it is expected that WLI will further increase its holdings in cash, which will play a key role in stabilizing its operating profitability. Offsetting factors include the significant reduction in WLI's capitalization due to the high investment losses and further deterioration in its underwriting performance as a result of the poor performance from unprofitable employee compensation (EC) business and the requirement to strengthen its claim reserves."

A.M. Best Co. has affirmed the financial strength rating of 'A-' (Excellent) and issuer credit rating of "a-" of Barbados-based Sagicor General Insurance Inc. with stable outlooks. "These rating actions reflect Sagicor General's historically profitable operating performance, prudent underwriting leverage, regional market presence and parental support," Best explained. "Sagicor General benefits from the synergies derived as a member of the Barbados-domiciled Sagicor Financial Corporation (SFC) group and has the commitment and support of SFC, its ultimate parent and one of the largest financial institutions in the Caribbean. SFC is publicly traded on the London, Trinidad and Barbados stock exchanges. Sagicor General is among the largest property/casualty insurers in Barbados and has a significant presence in Trinidad and Tobago, Dominica, St Lucia and Antigua. Excluding catastrophe related losses, Sagicor General's disciplined underwriting and appropriate risk pricing have historically enabled the company to achieve favorable operating results. Partially offsetting these strengths is the high concentration of equities as a component of Sagicor General's investment portfolio, its reliance on reinsurance and the increasingly competitive regional insurance environment.

A.M. Best Co. has affirmed the financial strength rating of 'A-' (Excellent) and issuer credit rating of "a-" of Bermuda-based Empyrean Re Ltd. , both with stable outlooks. Best concurrently withdrew the ratings at the company's request and assigned a category NR-4 to the FSR and an "nr" to the ICR. "The ratings of Empyrean Re are based on its excellent capitalization, experienced management team and sound business plan," said best. "These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company." Best also explained that Empyrean Re operates as a Bermuda-based reinsurer writing direct, reinsurance and retrocessional trade credit coverage produced through the broker market. Though indications of market acceptance are positive following the company's second year of operations, the ability of Empyrean Re to effectively build and establish a successful market presence can only be proven over time. Best also views any concentration of invested assets as a source of potential problems. However, these concerns are partially mitigated by the experience of the management team, as well as the low underwriting leverage contemplated in Empyrean Re's business plan and the anticipated support of its owner and sponsor, Man Group plc. Man Group plc is a publicly traded global provider of alternative investment products and a constituent of the FTSE 100."

Standard & Poor's Ratings Services has affirmed its 'BBB' long-term counterparty credit and insurer financial strength ratings on Bahrain-based non-life and life reinsurer Arab Insurance Group (B.S.C.) (ARIG). S&P then withdrew the ratings at the company's request, and it is no longer subject to ongoing surveillance. "At the time of withdrawal, the rating reflected the company's very strong capitalization despite the 19 percent reduction in shareholders' equity in 2008, and the company's good competitive position," S&P noted. "These factors were offset by marginal operating performance despite some improvement in the combined ratio, and execution risk relating to both business lines, and geographic expansion. The outlook at the time of withdrawal was stable and reflected our view that ARIG will maintain surplus capital in excess of the 'AA' (very strong) level in 2009. Also, the company is likely to continue to lag regional and international peers in terms of operating performance. In a related announcement S&P said that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) "are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54 percent holding, and is also the major service provider."

A.M. Best Co. has changed the financial strength rating to 'E' (Under Regulatory Supervision) from 'C' (Fair) and the issuer credit rating to "rs" from "ccc" of UK-based The Exchange Insurance Company Limited. "This action removes the under review with negative implications status originally assigned to the ratings in November 2008," said best. "The ratings of Exchange have been changed because the company has been placed into administration and due to the cessation of its normal activities as an insurance company. Exchange's management continue discussions with potential investors to sell the company. A successful conclusion to these talks will lead to a review

--Claimsjournal

Clyde and Co announces the addition of two new Middle East based partners

Clyde and Co LLP has announced the addition of two new Middle East based partners; Peter Hodgins in the area of Islamic Insurance (Takaful) within Clyde and Co's Financial Services group and Scott Aitken as an Abu Dhabi Real Estate partner.

Clyde & Co is one of the major international law firms in the GCC with over 160 specialist lawyers and paralegals operating as a single unit from offices in Dubai and Abu Dhabi in the UAE, and in Doha, Qatar.

The firm is already exceptionally well recognised for both Real Estate and Insurance industry expertise in the Middle East, with team members named by multiple legal directories as leading lawyers in the region.

Peter Hodgins is an insurance and reinsurance law specialist who worked for 10 years with the insurance practices of Clifford Chance and Reynolds Porter Chamberlain in London before moving to the Middle East in the summer of 2007.

Peter has worked on a range of Islamic law matters, including Takaful and Islamic finance, in Dubai and Riyadh where he was involved in the establishment of DLA Piper's affiliation office prior to joining the corporate insurance practice at Clyde & Co at the start of 2009. The Middle East insurance group at Clyde & Co comprises six partners and twelve lawyers.

Peter acts for both international and regional insurance interests, routinely acting for conventional insurers, Takaful operators, brokers and third party administrators in relation to the establishment, licensing and regulation of insurance operations in the GCC. He has extensive experience in developing new insurance products and has been involved in the development of both general and family takaful products for use in the GCC and beyond.

Scott Aitken is a real estate specialist who heads a team of four lawyers in the firm's Abu Dhabi office advising on on-shore and off-shore structuring for ownership, leasing and/or licensing.

In particular Scott acts for owners and operators in the branding of hotels and related residential developments and advises owners and operators of shopping malls, commercial buildings and labour camps in relation to all aspects of facilities management services including leasing, asset, property and facilities management. Included amongst Scott's major clients are some significant local banks.

Scott joined Clyde & Co as a consultant in December 2007, following 5 years with Australian law firms Clayton Utz and Mallesons Stephen Jaques where he was involved in a wide range of top-level Australian property work. Prior to entering the law, Scott spent some 15 years working for a major Australian bank across four jurisdictions.

--AME Info

UAE Stocks Slip; Drake & Scull Tumbles 26 Per Cent on Debut

DUBAI - Property and construction stocks dragged UAE shares down on Monday. Engineering and construction contractor Drake & Scull plunged 26 per cent below its offer price on its trading debut. The Dubai Financial Market benchmark index ended 1.04 per cent lower at 1,509.7. The Abu Dhabi Securities Exchange main index inched down 0.74 per cent to 2,311.11.

“The rest of the Dubai market drifted lower in the absence of retail focus, but the index managed to close above the 1500 level which is becoming a key psychological point,” said Matthew Wakeman, managing director at 
EFG Hermes.

Arabtec Holding, the country’s biggest construction company building the world’s tallest skyscraper in Dubai, retreated 2.38 per cent to Dh1.64.

Index heavyweight Emaar Properties, the largest property company in the Middle East, shed 1.46 per cent to Dh2.02. Deyaar Development edged down 2.12 per cent to Dh0.46, while Union Properties lost 1.47 per cent 
to Dh0.67.

Drake & Scull which sold shares last year, ended down 26 per cent to Dh0.74, below its offer price of Dh1.0 on its first trading day. “The poor showing of Drake & Scull merely reflected the sentiment of the market; clearly risk appetite is zero,” said Samer Al Jaouni, general manager at Middle East Financial Brokerage, adding that “the uncertainty out there will make it difficult for companies to go public in the next three quarters.”

Takaful House, a leading provider of Takaful insurance based in the UAE, was the last company listed on DFM in August 2008.

Mashreqbank PSC slipped 5 per cent to Dh174.60. The bank said it plans to convert federal government deposits into Tier-2 capital. Tier-2 capital is a banks’ secondary capital and includes items such as undisclosed reserves, general loss reserves and subordinated debt. It protects depositors after the value of Tier-1 capital, that includes items such as common stock, retained earnings and perpetual preferred stock — has eroded. In Abu Dhabi, construction-related stocks led declines with Arkan Building Materials Co. losing 6.88 per cent to Dh3.40. Ras Al Khaimah Cement Co. shed 4.72 per cent to Dh1.20 while Union Cement Co. gave up 5.21 per cent to Dh.2.11.

--Khaleej Times