New avenue to issue bonds

Securitisation of takaful premiums is possible but subject to thorough study
With the corporate bond market in a moribund state, another avenue for bond issuance is via the securitisation of takaful premiums.

According to Syarikat Takaful Malaysia Bhd (STMB) chief investment officer Azian Kassim, the idea is possible but it should be subjected to a thorough study “as the underlying principles of takaful business is totally different (from) that of conventional.”

Maybank Investment Bank Bhd fixed income research head Tan Chee Wee noted that car financing had already been securitised.

“It is the same as the securitisation of car financing – those borrowers are making the monthly payments that are in turn channelled into payment of interest rates on the bonds issued against these auto loans,’’ he said.

In this case, it would be the takaful policyholders who would be providing the cashflow.

“I would say it works, but the important thing is from an investor’s point of view to not just look at the structure but also understand the background of those who bought takaful insurance,” Tan said. “At the end of the day, it boils down to the individual credit of all the people who have taken (takaful) insurance and who are paying the premium on a yearly basis.”

At present, an example of an auto finance-backed corporate bond is the secured fixed rate bond issued by Cepat Assets Bhd.

Securitisation, the process of pooling and repackaging cashflow-producing financial assets into bonds, will provide an opportunity for takaful operators to unlock the value of the underwriting business by transferring certain portions of risks to capital markets.

Azian said the move would require “concerted efforts from various parties for this to happen and among other things, the regulator and syariah board need to be involved.”

“As no such product has been made available in the Malaysian market, the regulatory requirements are yet to be determined. However, given the recent fallout of the collateralised debt obligation (CDO) market in the United States, it is assumed that the regulatory bodies would be very stringent in approving such products,” she added.

For the syariah board, concerns involve the structure for the transaction and also the usage of takaful contributions as the underlying asset.

“At this juncture, there is no plan to securitise takaful contributions. However, we would keep our options open to this new innovative capital market instrument. Should there be any opportunity to embark on such a transaction, the viability of such exercise would be assessed accordingly before any decision is made,” she said.

For the year ended Dec 31, 2008, the total net contribution income for all the takaful operators was RM3.025bil, while total takaful fund assets stood at RM10.569bil.

As to how much this would translate into the potential value of bonds, Azian said: “We do not have any estimates as this is still subject to a detailed study by all respective parties especially capital market players.”

Due to the global financial crisis, there have been calls to move away from complex securitisation schemes since the US subprime collapse is partly blamed on asset-backed securitisation linked to mortgages.

“In our view, the subprime crisis was not a result of complex securitisation schemes but due to a combination of a lack of regulatory supervision and proper assessment by the investors,” she added.

Azian reckoned that the securitisation of takaful contributions would spread the risk more broadly rather than just “warehousing” it in a particular takaful company which has lower capacity and diversification potential than the capital market as a whole.

“The removing of risks from the takaful industry would reduce transaction, agency and regulatory costs, thus increasing the efficiency of capital. Investors would also benefit from the availability of new classes of securities.

“Furthermore, securities based on risks associated with the takaful industry such as catastrophic, mortality and longevity risks are likely to have a relatively low co-variance with market systematic risk, making them even more valuable for diversification purposes,” she said.

However, Azian cautioned that such securitisation must be accompanied with stringent surveillance from the regulatory bodies and proper product education.

--The Star Online

Manulife to apply for takaful licence soon

Insurer Manulife Holdings Bhd will submit an application before the end-October deadline for a takaful licence in a bid to tap into the growing Islamic insurance market.

The plan by Manulife to seek a takaful licence is in line with the Government’s move to liberalise the financial sector and allow more takaful players into the market.

The liberalisation, among others, would see up to two new family takaful licences being granted this year and allow, with immediate effect, the increase in foreign equity participation in insurance companies and takaful operators to 70% from 49% now.

Group chief executive officer Michael Y.L. Chan said as a company with a global reach and experience, Manulife was heeding the Government’s call to make Malaysia a regional Islamic finance hub.

“We, too, want a slice of the booming takaful market as the present penetration rate in this segment is about 7% compared with about 40% in the conventional side,’’ Chan told StarBizWeek.

Having a takaful business fits into the group’s aspirations as currently, it has takaful operations in Indonesia.

Chan said it would also be beneficial to the group as the takaful operations could be later expanded to the Philippines, Thailand and China, where Manulife Group had a significant presence.

On whether there are plans by its foreign shareholder, Manulife Financial Corp, to increase its stake in the company with the financial sector liberalisation, Chan said it had plans but, at the moment, there were no firm decisions by the board.

On its newly-formed unit Manulife Unit Trust Bhd, Chan said the company would launch three funds in September – a global resources fund, a China-related product and a fund that would invest solely in India.

He said the global resources fund would be the first to invest in precious metals and energy.

As for the China and India funds, Chan said these two economies were powerhouses of Asia and offered huge markets, and they experienced good growth despite the grim economic environment.

He also expects 300 of its total agency force of nearly 1,500 to sell unit trusts this year and about 50% to do so in 2010.

As for its new business premiums, Chan said Manulife expected a 5% growth this year from RM63mil achieved last year.

He said the company planned to unveil two life protection-based products by year-end.

--The Star Online

Takaful Ikhlas Implements Corporate Social Responsibility

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

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

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

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

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

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

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

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

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

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

-- BERNAMA

Lawsuit arguing AIG bailout is unconstitutional can proceed

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

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

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

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

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

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

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

--Business Insurance

BIMB profit falls on lower takaful sales

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

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

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

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

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

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

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

--The Star Online

QFC Invites Local Financial Institutions To Operate In Doha

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-- BERNAMA

Manulife to apply for takaful licence soon

Insurer Manulife Holdings Bhd will submit an application before the end-October deadline for a takaful licence in a bid to tap into the growing Islamic insurance market.

The plan by Manulife to seek a takaful licence is in line with the Government’s move to liberalise the financial sector and allow more takaful players into the market.

The liberalisation, among others, would see up to two new family takaful licences being granted this year and allow, with immediate effect, the increase in foreign equity participation in insurance companies and takaful operators to 70% from 49% now.

Group chief executive officer Michael Y.L. Chan said as a company with a global reach and experience, Manulife was heeding the Government’s call to make Malaysia a regional Islamic finance hub.

“We, too, want a slice of the booming takaful market as the present penetration rate in this segment is about 7% compared with about 40% in the conventional side,’’ Chan told StarBizWeek.

Having a takaful business fits into the group’s aspirations as currently, it has takaful operations in Indonesia.

Chan said it would also be beneficial to the group as the takaful operations could be later expanded to the Philippines, Thailand and China, where Manulife Group had a significant presence.

On whether there are plans by its foreign shareholder, Manulife Financial Corp, to increase its stake in the company with the financial sector liberalisation, Chan said it had plans but, at the moment, there were no firm decisions by the board.

On its newly-formed unit Manulife Unit Trust Bhd, Chan said the company would launch three funds in September – a global resources fund, a China-related product and a fund that would invest solely in India.

He said the global resources fund would be the first to invest in precious metals and energy.

As for the China and India funds, Chan said these two economies were powerhouses of Asia and offered huge markets, and they experienced good growth despite the grim economic environment.

He also expects 300 of its total agency force of nearly 1,500 to sell unit trusts this year and about 50% to do so in 2010.

As for its new business premiums, Chan said Manulife expected a 5% growth this year from RM63mil achieved last year.

He said the company planned to unveil two life protection-based products by year-end.

--The Star Online

MoU On' Takaful' Plan For UBD Army Cadets

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

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

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

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

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

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

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

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

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

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

However, she did not elaborate on it further.

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

-- Courtesy of The Brunei Times

Saudi bourse weighed down by profit taking

The Tadawul All Share Index (Tasi) declined by three per cent last Saturday, dipping below 6,000 points.

The bourse was weighed down by an eight per cent decrease in the Saudi Basic Industries Corp (Sabic) share price on profit taking after the stock hit 67 riyals, recording a 61 per cent since April 21.

Following these losses, the market bounced back again above 6,000 points, fuelled by the increase in oil prices and the positive performance of the global equity markets.

Meanwhile, bank stocks also declined due to profit taking, especially those of Samba and BJAZ, by between six and seven per cent. In addition, speculation continued on the insurance sector's shares.

The trading values of sectors were as follows: Petrochemical Industries 22 per cent; Insurance 17 per cent; Banks and Financial Services 11 per cent; Industrial Investment eight per cent; Agriculture and Food Industries eight per cent; Building and Construction eight per cent, Telecommunications and Information Technology seven per cent; Real Estate Development six per cent; Multi-Investment four per cent, Retail four per cent; Transport two per cent, Hotels and Tourism two per cent; Media and Publishing one per cent; while Cement, Energy and Utilities remained unchanged.

The top five gainers were: Al Ahli Takaful Co 27.5 per cent; Tihama Advertising and Public Relations Co 25.4 per cent; SABB Takaful Co 25.1 per cent; Saudi Transport and Investment Co 21.6 per cent; and Saudi Industrial Export Co 19.3 per cent.

The top five losers were: Allied Cooperative Insurance Group -22.5 per cent; Samba Financial Group -6.7 per cent; Bank Al Jazira -6.2 per cent; Arabia Insurance Cooperative Co -5.4 per cent; Makkah Construction and Development Co -5.1 per cent. The Tasi registered 6052.63 points on Wednesday, closing up by 0.1 per cent from last week. As of yesterday, the Tasi is 26.0 per cent higher than at the start of the year. Trading value reached 43.3 billion riyals, down against last week's 48.8 billion riyals. Sabic dominated trading value at 13 per cent, followed by Alinma at eight per cent and Zain KSA at four per cent.

--Gulfnews

Takaful provider upbeat on premium income

Takaful premium income is expected to contribute 20% to HSBC Amanah Malaysia Bhd’s revenue by 2011, according to HSBC Amanah Takaful (Malaysia) Sdn Bhd chief executive officer Zainudin Ishak.

“At the moment our contribution to the group is insignificant,’’ he told reporters at briefing on a survey conducted by HSBC Insurance (Asia Pacific) Holdings Ltd yesterday.

HSBC Amanah Takaful was registered in August 2006 and the company had recently turned profitable, Zainudin said, adding that new regular premium income at the takaful operator had doubled to RM30mil from RM15mil recorded six months ago.

Zainudin said he expected the “momentum” to continue for the rest of the year, despite concerns that the economic slowdown would limit consumers’ demand for insurance products.

The survey by HSBC Insurance showed that two of the most specific long-term wealth aspirations for Malaysians are related to financial security in retirement and education funding for children.

One of the obstacles to achieve this, however, is the “lack of investment instruments with good returns” in the current market conditions.

Zainudin said HSBC Amanah Takaful intended to leverage on the strength of the group’s brand name, and the fact that HSBC had been in Malaysia for the past 125 years.

“HSBC is a trusted brand name in Malaysia and we have various takaful products to cater to local needs,’’ he said.

The new products were being developed for the Malaysian market through the group’s global expertise in Islamic finance, Zainudin added.

HSBC Amanah is the Islamic banking arm of HSBC Bank Malaysia Bhd. It has four stand-alone branches, coupled with the parent bank’s 40 outlets across the country.

--The Star Online

Takaful IKHLAS Launches Ikhlas Hajj Saving Takaful

Takaful Ikhlas Sdn Bhd (Takaful IKHLAS) has launched its latest product, the Ikhlas Hajj Savings Takaful, in Kuching in a ceremony officiated by Chief Minister Tan Sri Haji Abdul Taib Mahmud.

The Ikhlas Hajj Savings Takaful is a protection as well as investment savings plan designed to assist and fulfil the needs of those planning to perform the haj.

"The cost of performing the haj is increasing and those planning to visit the holy land are faced with a rise in the cost of air-fare, accommodation, transport and health services.

"The Ikhlas Hajj Savings Takaful is aptly designed to assist those planning to perform the haj through takaful protection services as well as savings investment which are more secure," said Takaful IKHLAS president and chief executive officer Datuk Syed Moheeb Syed Kamarulzaman.

The Ikhlas Hajj Savings Takaful has a forecast contribution target of RM3 million for the financial year 2009/2010. Takaful IKHLAS is confident that the product is capable of enhancing its revenue contribution in the years to come.

Among the benefits offered through the Ikhlas Hajj Savings Takaful plan are coverage for permanent and total loss of ability and long term critical diseases. Customers will also enjoy delivery, part cash withdrawal and maturity benefits.

Age limit for participating in the Ikhlas Hajj Savings Takaful is from 30 days to 60 years. Further information can be obtained from www.takaful-ikhlas.com.my.

--BERNAMA

Prudential Records 17 Percent Rise In New Business Sales

Prudential Assurance Malaysia Bhd (PAMB), part of UK-based Prudential Plc, has posted a 17 percent growth in new business sales in first quarter 2009 compared to the same period last year.

The company's new business annual premium equivalent (APE), which consists of retail life insurance sales and takaful contributions, rose to RM122 million from RM105 million previously, it said in a statement today.

"These results once again demonstrate the strong fundamentals and excellent momentum of Prudential's business in Malaysia," said PAMB chairman Tony Wilkey, who is also chief executive, insurance, Prudential Corporation Asia.

He said the company's aggressive recruitment drive, together with systematic implementation of sales and marketing efforts to improve agency activity, continued to have a positive impact on its performance.

"We have successfully recruited over 500 new agents in the first quarter of the year, bringing the total of our agency force to 9,766," Wilkey said.

"APE sales per active agent also increased by 10 percent," he said, adding that the positive growth was also supported by strong consumer demand for protection and health products.

-- BERNAMA

Aman Insurance Wins ’Best Takaful Operator Of The Year’ At Middle East Insurance Awards Ceremony

Aman Insurance, the region’s leading insurance company, has been awarded the ‘BEST TAKAFUL OPERATOR OF THE YEAR 2009’ for the second year running by Policy Magazine at the Middle East Insurance Awards Ceremony at Raffles, Dubai.

Commenting on the award, Mr. Hussein Al Meeza, Managing Director and CEO of AMAN, said:
‘’This year’s award highlights our on going commitment to serve the local and regional insurance market and was in recognition of our continual compliance with Sharia’a law and our commitment to develop the Takaful Market. Winning the ‘BEST TAKAFUL OPERATOR OF THE YEAR 2009’ for the second year in a row was a real honour for Aman. We are extremely proud of our achievements this year and look forward to continuing to exceed the needs and expectations of our shareholders throughout the region.”

Aman Insurance was awarded Best Takaful Operator of the year based on its development strategy, product innovation, response to customer needs and quality of service. The award was received by Mr. Iqbal Mankani, Chief Operating Officer of Aman.

As a relatively young company, Aman has established itself as one of the leading local and regional Takaful Company with strategic alliances throughout the Arab World. Aman thanks its customers and partners for the confidence reposed on Aman and assures them it would continue to excel in its service to the community.

--Middle East Events

Takaful IKHLAS Announces Quiz Winners

Takaful IKHLAS President Haji Syed Moheeb Syed Kamarulzaman selecting winners for Takaful IKHLAS quiz. Pic courtesy of Takaful IKHLAS PETALING JAYA, May 13 (Bernama) -- Takaful Ikhlas Sdn Bhd (Takaful IKHLAS) has announced the winners of KUIZ IKHLAS @ MSAM 09 which commence 18 till 27 April 2009 in conjunction with the 2009 Malaysia Trust Fund Week in Johor Baharu.

Drawing for the winners was done at Takaful IKHLAS headquarters by Takaful IKHLAS President Haji Syed Moheeb Syed Kamarulzaman and Vice President Haji Wan Mohd Fadzlullah Wan Abdullah.

Syed Moheeb said, "we will continue to implement various creative and innovative activities such as this quiz for visitors of our exhibition. We see this as an alternative platform to introduce Takaful IKHLAS products and services."

According to Takaful IKHLAS, the quiz had been a hit with the visitors at every Malaysia Trust Fund Week events. Without having to make any purchase, visitors age 18 and above can enter this quiz by answering three simple questions.

Takaful IKHLAS has received more than 40,000 entries and most of the participants lived in Johor and Singapore.

The quiz prizes include Haj and Umrah packages and 20 consolation prizes of RM200 for each winner.

-- BERNAMA

PruBSN: Take-up Rate For Takaful Products Still Low

The take-up rate for takaful products is still low in the country due to misperception, according to Prudential-BSN Takaful Bhd (PruBSN) chief executive officer Mohamad Salihuddin Ahmad.

To date, the take-up rate was only 7.7 percent compared to 40 percent for conventional life insurance products, he said.

This, Salihuddin said, could be due to the misperception that takaful products were only for Muslims only.

"Takaful is not a product for Muslims only and since we started business more than two years ago, we have adopted takaful for all concepts," he told reporters after launching the PruBSN Johor Baharu business centre here today.

However, PruBSN, a joint venture between Prudential Plc and Bank Simpanan Nasional, did not see the misperception as a setback but an opportunity to explore, he said.

With more than half of its 10,000 agents being non-Muslims, Salihuddin was optimistic that PruBSN could grow further and capture a bigger share of the non-Muslim market.

At present, 35 percent of its more than 216,000 policyholders are non-Muslims, he said.

"Unlike conventional insurance, takaful products are Syariah-compliant and the best way to go as they propagate transparency," he added.

PruBSN, which has received about RM300 million in regular contributions from policyholders, planned to open five more business centres nationwide this year.

Salihuddin said that between RM500,000 and RM1 million will be invested in each business centre, depending on the size and renovations to be made.

He said the company decided to open the Johor Baharu business centre as it expects an upswing in development with the Iskandar Malaysia project, and it currently has 239 agents servicing customers in the state.

Its other business centre was opened recently in Shah Alam, Selangor, while its marketing and administrative centre is located in Wangsa Maju, Kuala Lumpur.

-- BERNAMA

Takaful Ikhlas Joins PNB Programme In Kuching

In conjunction with the Joint Programme with Permodalan Nasional Bhd (PNB) in Sarawak, Islamic based insurance and financial services provider, Takaful Ikhlas Sdn Bhd (Takaful IKHLAS) will be organising several activities from May 19-21 at the Padang Merdeka in Kuching.

In a statement Friday, Takaful IKHLAS said the company's programme in Kuching is a follow up to its participation in the investment week programme "Minggu Saham Amanah Malaysia (MSAM) 2009" which was held in Johor Baharu last month.

"Takaful IKHLAS participation in the programme will enable the company to provide more exposure to the people in Sarawak on the meaning of takaful and the role and benefits of protection savings as well as its other products," Takaful IKHLAS President and Chief Executive Officer Syed Moheeb bin Syed Kamarulzaman said.

Besides the information, the exhibition space taken up the company will also offer other activities such as Quiz, drawing contest, a zakat payment counter and workshops.

"Visitors to the Joint Programme with PNB will also have the opportunity to win various prizes through the activities," Syed Moheeb said.

Among the prizes lined up include umrah packages as well as consolation prizes comprising deposit accounts of RM200 in Tabung Haji accounts for Muslims and in Islamic savings accounts for non Muslims as well.

Other activities to be held during the event include free health check-up and a blood donation campaign.

Takaful IKHLAS, which began operations in July 2003, is the subsidiary company of MNRB Holdings Bhd, an investment holding company listed on the Main Board of Bursa Malaysia. Its major shareholder is Permodalan Nasional Bhd.

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

-- BERNAMA

Dubai Islamic Bank expands product portfolio with Al Islami Takaful Programme

Dubai Islamic Bank (DIB) announced the launch of Al Islami Takaful Programme, its Sharia-compliant savings plan with Takaful benefits, designed to meet the unique needs of customers looking for Islamic financial planning solutions.

The Al Islami Takaful Programme is the latest addition to DIB’s suite of wealth management solutions, which include savings schemes, mutual funds, and other structured products. This programme combines savings and investment plans with a personal Takaful protection, creating a unique product that offers two key benefits – savings and protection – within the same plan.

The Al Islami Takaful Programme has been developed specifically for the needs of DIB customers by FWU - a global leader in Takaful expertise, with Dubai Islamic Insurance & Reinsurance Company (Aman) as the Wakeel.

Highlighting the advantages of the new product Dr. Adnan Chilwan, Chief of Retail and Business Banking, Dubai Islamic Bank, said: “The launch of the Al Islami Takaful Programme is a key milestone in the execution of our retail banking growth strategy, as it signifies the introduction of another Islamic retail product offering savings, investment and protection to the bank’s customers.This is further proof of DIB’s continued commitment to provide attractive financial planning solutions to different customer segments, in line with their needs and resources.”

The Al Islami Takaful Programme offers a range of investment options to suit different risk profiles, with flexible payment options – starting from monthly contributions to one-time lump sum contribution – and flexible maturity periods. Depending on their age, customers can choose a plan term from 7 to 30 years (for regular savings) and 3 to 30 years (for lump sum investment). The product also offers the flexibility to increase/decrease contributions and make partial withdrawals at any time during the term.

The Al Islami Takaful Programme is invested in Sharia-compliant funds that seek to generate attractive returns for participants in the programme. Returns on their contributions made into the investments will depend on the performance of the funds.

Dr. Chilwan added: “This programme gives customers the flexibility to switch between investment options at any time, make partial withdrawals and early encashments or even continue your investment plan after maturity. The annual solidarity 'Takaful' fund surpluses are distributed among all participants, proportionate to their contribution. Additionally, the programme also offers customers the opportunity to appoint up to four beneficiaries with an option to change the beneficiaries throughout the term of the investment, enabling complete peace of mind and protection to loved ones.”

Prospective customers can just walk into any DIB branch and meet a Customer Service Officer, who can provide advice on the right investment plan and structure of the Al Islami Takaful programme, to suit their individual requirements.

--Al Bawaba

Pan Asia Bank ties up with Amana Takaful Insurance for Bancatakaful

Seen here exchanging the MOU from left, Aashiq Aminuddin, Shafraz Asnavi, Reyaz Jeffrey ( CEO- Family Takaful ), Kimarli Fernando ( CEO- Pan Asia Bank), Rizan Mansoor and Kamoor Sourjah ( DGM-Business Dev.-Pan Asia Bank)

Pan Asia Bank and Amana Takaful Insurance have collaborated to offer Bancatakaful, under which, Takaful life policies will be offered to all Pan Asia Bank customers through the Pan Asia Bank branch network. Undoubtedly, this is yet another first from Amana Takaful Insurance & Pan Asia Bank, who are rapidly moving towards the pinnacle of excellence in finance sector in Sri Lanka.

What is Takaful?

Takaful is an insurance system through which the participants donate part of their contribution, which are used to pay claims for damages suffered by some of the participants while balances goes into an investment fund. Amana Takaful's role is to manage the insurance operations and invest insurance contributions in line with Islamic principles. Takaful is a novel way of insurance that is based firmly on values of taking care of each other through trust, equality and ethics. Takaful solutions are on par with conventional insurance solutions but differ fundamentally on the operations of the funds. When you obtain a Takaful Policy, part of your contributions (premiums) are pooled into a fund known as Participants Tabarru (Donation) Funds (PTF) and the balance to a Participants Investment Fund (PIF). PTF is invested in accordance with Shariah and is used to pay claims. PIF is solely for the participants' savings and investment, PIF funds are invested on principles of Al Mudarabah, which is a commercial profit sharing contract between providers of funds and the entrepreneur who actually conducts the business. After a specific period if the participant needs financial assistance he or she could withdraw a considerable percentage of the PIF. Policy holder has the privilege in cancelling the policy at any given time and is entitled to withdraw the PIF along with the profit, subject to cancellation fee. Ms. Kimarli Fernando Director/CEO of Pan Asia Bank stated ,'' Pan Asia Bank is delighted to be the first bank in Sri Lanka to collaborate with Amana Takaful to initiate a premier service to its customers in the arena of Takaful insurance, for the entire family. This partnership will open new doors, propelling the banking industry to stratospheric heights. She also added having got valuable feedback from its Muslim customers for the need for Sharia compliant products, Pan Asia Bank as a "Bank of all communities", is keen to meet the needs of its customers. Bancatakaful is such product and it will be followed other Islamic banking products which we plan to introduce in the future and will be available not only to Muslim customers but to all our valued customers. 'Commenting on this historic occasion, Mr. Reyaz Jeffrey GM/CEO of Amana Takaful Life said, 'Amana Takaful as the leader in Takaful is very happy to be associated with Pan Asia Bank on this unique tie up which will enable Amana Takaful to reach out to a wider audience and for Pan Asia Bank to offer a unique value addition to their financial products offerings'.Pan Asia Bank has 33 branches island wide and Amana Takaful Insurance has 18 branches in Sri Lanka along with a fully fledged operation in Maldives.

--FinancialTimes

'Pak-Qatar' to provide Takaful to Meezan customers

Meezan Bank Ltd and Pak-Qatar Family Takaful Ltd have signed an agreement whereby all customers of Meezan Banks Housing Finance (Easy Home) will be provided with Shariah-Compliant Life Takaful Coverage. Irfan Siddiqui President and CEO Meezan Bank Ltd and P. Ahmed CEO Pak-Qatar Family Takaful Ltd. signed the Takaful (Islamic insurance) Agreement at a ceremony on Tuesday.
According to the agreement, all housing finance customers of Meezan Bank will be provided comprehensive Takaful that will cover not only life but also accidental and natural disability. Moreover, the premium for the first year will be paid by the bank which is to be adjusted later.

The insurance penetration in Pakistan is only 0.3 per cent of its total GDP, which means just 10 to 15pc families are opting out this facility, while in developing countries 60 to 70pc families go for this.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 1-3, 2009. Los Angeles, CA.

Speaking on the occasion, President and CEO Meezan Bank Ltd. Irfan Siddiqui said that Meezan Bank has always focused on coming up with Halal Riba-free products and innovative facilities for its customers and the Takaful arrangement with PQFTL is another step in the direction of making Islamic Banking the banking of first choice.

CEO Pak-Qatar Family Takaful Ltd said that they were delighted to sign the Takaful agreement with the countrys pioneering Islamic bank, which will pave the way for numerous benefits for its customers. He said that Pak-Qatar Family Takaful is always looking for ways to provide value added products to the people of Pakistan. By joining hands with Meezan Bank we would be able to reach out to many people who would otherwise not have had the benefit of a customer centric and Shariah-compliant risk mitigation tool, he added.

Ahmed said that Pak-Qatar Family Takaful has the financial strength and expertise to safeguard investments and meet the long-term investment needs of the people in Pakistan. He further said that they are rapidly expanding their distribution network in order to achieve their vision of providing financial protection to everyone through Takaful.

--tmcnet

MAA Takaful gets syariah expert to stay ahead of competition

MAA Takaful Bhd aims to edge ahead of others in the Islamic insurance market through initiatives such as being the first local takaful player to have a syariah expert on its board.

Chief executive officer Salim Majid Zain says having an expert syariah adviser on board will help the company make informed strategic decisions and help it face growing competition in the industry.

“We are serious in ensuring that all aspects of our operations are syariah-compliant and certainly will have an edge over other players with the presence of our syariah adviser to provide us with relevant expert advice on syariah principles.

“Having an expert on the board will also enhance our expertise in Islamic finance, corporate governance as well as give more confidence to our target market customers,’’ Salim says in an interview.

As one of the latest entrants into the takaful market, the company has aggressive plans to grow its market share, he says, adding that the company is recruiting talented agents.

At present the company has about 15,000 agents, of which 30% are active.

The company has also introduced customer-centric financial planning and sales-automation software in an effort to enhance service.

Investment-linked funds is also one of the areas of focus for the group.

To this end, Salim says MAA Takaful will also be hiring a top fund manager to assist in the development and management of these funds.

Investment-linked funds will continue to be the main contributor to family takaful business, he adds.

The company’s market share in investment-linked takaful business last year for regular new business was 13% and about 10% for single contribution (premium).

It is targeting a 35% growth in regular investment-linked new business by the end of the year.

There are eight players in the takaful market currently and the granting of up to two new family takaful licences this year under the Government’s liberalisation of the financial sector is expected to further heat up competition.

Asked on how it would compete with other new players coming on board, Salim says: “The new players will certainly increase competition and this would also pave the way for greater acceptance of takaful as an alternative to insurance and traditional invesment products.

“MAA Takaful inherits the MAA brandname which has been long established in Malaysia. It is known and well represented in the multi-ethnic population which provide the cutting edge in growing our business and retaining our customers.”

MAA Takaful is a 75:25 joint venture between MAA Holdings Bhd and Bahrain’s Solidarity Company BSC.

--TheStarOnline

Amana Takaful calls for EGM

Company’s NAV decreases to 43% of stated capital

By Jithendra Antonio

Amana Takaful PLC has informed its shareholders in a letter that company has called for an Extraordinary General Meeting (EGM) on May 14th 2009 since the company’s Net Asset Value (NAV) has reached half of its Stated Capital. Further in the letter signed by Director/ Chief Executive Officer Ehsan Zaheed states that the NAV has decreased to Rs.214,189,707 as at December 2008 which was recorded to be Rs.266,707,463 as at December 2007. Company’s net assets value as a percentage on stated capital stands at 43% as at December 2008 compared to 53% which was in December 2007. Amana Takaful PLC’s stated capital stands at Rs.500,000,360 at present. The EGM has been called in compliance with the Companies Act No.07 of 2007 Section 220

4Contd. on B4

where a company is required to convene an EGM to its shareholders in the event when the net assets of the company are less than half of its stated capital. Amana..

In the letter company says that the losses have risen from the operation of the insurance business which includes underwriting results and the operating and administration expenses. “Amana Takaful PLC is completing the first 10 challenging years with the establishment of the General and Life segments and 18 branches island wide and one in Maldives. The company had to invest into brand development for both General and Life Products” said the company in letter highlighting that Amana Takaful’s options are very limited with regard to investment income due to Sharia compliance compared with the conventional insurance companies which reflect better profitability. Furthermore, “54% of the cumulative loss has arisen in the year 2007 due to heavy claims incurred in that specific year among other reasons” stated the company.

Under Retained Earnings of the company’s financials, Amana Takaful’s balance stands at a loss of Rs.233,292,897 as at January 1st 2008 and company has reached a net loss of Rs.52,517,756 compared to net loss amounted to Rs.153,076,543 in the year 2007. The Company’s balance stands at a total loss of Rs.285,810,653 as at December 2008. However the letter states that immediate measures which have been initiated in 2008 had resulted in the drop in the loss by 65% from 153 million in 2007 to 52 million in 2008. And to further improve the profitability in the year 2009 and beyond, the company states that it has taken measures to brought in more focus on the market mix and strategies are formulated to have a 50% growth in the revenue. “Steps are taken to introduce more stringent credit policies to minimize credit risk and the stagnant investments into real estates will be divested within the regulations of Insurance Board of Sri Lanka (IBSL) into short term Islamic based investments to earn more profits from investments.” The Company also said that it will take steps to manage staff cost with additional measures to minimise the fixed component and link them to production (make it variable) and further to improve underwriting quality to minimise the underwriting risk according to the letter.

Beginning as a collaboration with Takaful Malaysia on 7th December 1998, Amana Takaful PLC is the first insurance company in Sri Lanka to pioneer the process of ‘Refunding Surplus’ at the end of each policy term. Refund of Surplus is the process of sharing underwriting profit among all participants (customers) who have not submitted a claim during the year and Amana Takaful PLC has paid approximately Rs.6 million as surplus refund for ‘General Insurance Participants’ in 2007. Amana Takaful is reinsured with Best Re of Labuan, Malaysia, Labuan Re of Labuan, Malaysia, MNRB of Malaysia, Asian Re of Thailand, Kuwait Re of Malaysia (Country of origin - Kuwait) and Tokio Marine Re-Takaful (Pvt) Ltd of Singapore (Country of origin- Japan) according to company profile. ‘Takaful’ is a risk management concept that is based on mutuality and partnership; simply, ‘Takaful’ means ‘Joint Guarantee’ in which several parties are involved. ‘Takaful’ is an Islamic insurance concept which is firmly grounded in Islamic financial principles, observing the rules and regulations of Islamic law. This concept has been practiced in various forms for over 1400 years in the world.

--Financial Tim

PQFTL and Meezan Bank sign agreement

Meezan Bank Ltd and Pak-Qatar Family Takaful Ltd (PQFTL) signed an agreement under which all customers of Meezan Bank’s Housing Finance (Easy Home) would be provided with Shari’ah-Compliant Life Takaful Coverage. President and chief executive officer Meezan Bank, Irfan Siddiqui and Chief executive officer Pak-Qatar Family Takaful, P Ahmed signed the agreement. According to the accord, all housing finance customers of Meezan Bank would be provided comprehensive Takaful that would cover not only life but also accidental and natural disability.

--(Daily Times) staff report

Takaful firms 'must gear up for future challenges'

The high growth rates reported in the global takaful industry cannot be sustained forever and companies must gear up for the challenges ahead, said a top Bahrain-based expert. Solidarity chief executive Sameer Al Wazzan was speaking at the opening of a two-day takaful seminar at the Elite Suites. The event was organised to bring senior executives from across the world to share experiences, discuss developments and address the challenges that lie ahead. The second International Co-operative and Mutual Insurance Federation's (ICMIF) Takaful Network Seminar is being hosted by Solidarity Group, a member of the Ithmaar banking group. 'Many of our companies were formed during the boom years on the basis of feasibility studies and business plans drawn up on the basis of higher rates on economic growth in target markets,' said Al Wazzan. 'The recent global financial crisis was not only unexpected, but the extent of the downturn could not be anticipated,' he said. 'Consequently, it is very important for us, as takaful practitioners, to examine not only growth prospects, but also the possible constraints and hurdles which our industry may face under current financial and economic conditions,' said Al Wazzan. 'Any over optimism needs to be scaled down and practical issues which have surfaced need to be recognised and dealt with in realistic terms. 'We must, collectively, debate these issues, understand the realities and work to overcome the challenges we will face,' he said. Al Wazzan praised the role played by the Central Bank of Bahrain (CBB) in contributing to the development of the region's takaful industry. 'The CBB has been a pioneer in this region in promulgating regulations specifically covering takaful,' he said. 'This has spurred growth in the number of takaful and re-takaful companies established in Bahrain, as well as the level of business generated,' he added. CBB Financial Institutions Supervision executive director, Abdul Rahman Al Baker delivered a presentation entitled 'Takaful Industry - Challenges and the Way Forward.' Al Baker presented an overview on the takaful industry from both the global and national perspectives. He also discussed the main factors for growth of takaful, the current and future challenges, and the way forward. --TradeArabia News Service

Nexus expands into Qatar and launches Takaful product

Nexus, one of the largest IFA firms in the Middle East, has opened a Qatar office following regulatory approval from the Financial Centre Regulatory Authority.

The development comes as the company, formerly the Middle Eastern distribution arm of insurer Zurich, rolls out a Takaful insurance product for firms designed to provide coverage against a range of business risks.

The Business Protector product, which has been developed in partnership with Dubai’s Salama Islamic Arab Insurance Company, includes cover for property, interruption to business, employee compensation, among a number of other areas.

Mahmoud Nodjoumi, chief executive of Nexus, said: “[Business Protector] is part of our joint efforts to accelerate the development of Takaful and insurance solutions and expand the services that we provide to our clients. The prospects for increasing the insurance penetration rate in the regional economies are clearly positive; and with the market reach and operational sophistication of the product, we are confident that the single, comprehensive Business Protector policy will help regional businesses function seamlessly.”

Rafiq Halani, general Manager – general and health at Salama, said the policy, which provides cover ranging from AED 500,000 to 30m, provided comprehensive cover.
“What makes the Business Protector a complete plan is that it covers the entire gamut of insurance requirements across various sectors – from media to industrial to food and beverages,” he noted.

--International Adviser

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.

-- BERNAMA

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):
1(non-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
lifted;

- 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.

--Reuters

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.

--Tradingmarkets.com

Takaful Ikhlas eyes RM2mil premiums from big bike product

By ZAZALI MUSA

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.

--Thestaronline

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