Etiqa eyes RM7.5b gross written premiums

Tuesday, October 25, 2011, 04.25 PM

Etiqa Insurance and Takaful expects its overall gross written premiums (GWP) to increase to RM7.5 billion by 2015 from RM4.3 billion this year.

Etiqa's current GWP places it second below Great Eastern with GWP amounting to RM5.6 billion.

"It is definitely an achievable target for us considering our solid financial strength and as we increase our GWP from RM2.8 billion in 2006 to RM4.3 billion this year, making us a strong number two in the market," said its chief executive officer Hans de Cuyper.

At a media briefing here today, he said Etiqa Takaful is one of the key players in the development of the takaful industry in Malaysia, being the first takaful company in the world to exceed RM2 billion in contributions in 2011.

He also said the amount  was achieved only three years after its takaful contributions touched RM1 billion.
"We have been able to double the revenues for our takaful business in three years' time and by now we are definitely the biggest takaful company in the world," he added.

He said market position is viewed at a combined basis of the insurance premiums and takaful contributions in relation to other industry players.

Although Etiqa is one brand with two separate entities -- insurance and takaful -- he said he wants both to prosper regardless of where the business flows into.

He added that on a combined basis, Etiqa is the second biggest insurance and takaful company in Malaysia.

"With an institution like Maybank behind us, we are definitely going to achieve and maintain our leadership in takaful and insurance," he said referrrig to the company's 2015 target.

De Cuyper said they have the widest distribution platform in the country with Maybank being the bancassurance partner.

Other moves taken by Etiqa in realising the target are upgrading the infrastructure, optimising operations, introduction of new products and looking into humanising insurance and takaful.

"Our goal is to be the market leader in the Malaysian insurance and takaful industry and we will not lose sight of the goal," he said. --Bernama

Source : http://www.btimes.com.my/Current_News/BTIMES/articles/20111020185428/Article/index_html

 

Etiqa may consider M&A to become largest insurer

Friday October 21, 2011

KUALA LUMPUR: Malayan Banking Bhd's (Maybank) insurance and takaful arm Mayban Ageas Holdings Bhd, better known by the brand name Etiqa, is keeping options open on expansion plans going forward, as it targets to become the country's largest insurer by 2015.

Etiqa, formed four years ago after a merger with Malaysia National Insurance Bhd and Takaful Nasional Sdn Bhd, is 69.05% owned by Maybank with the remainder stake owned by Ageas Insurance International. It distributes insurance and takaful products under the Etiqa brand name.At a media briefing to introduce Etiqa's new senior management line-up, its chief executive officer Hans de Cuyper said the insurer was open to growing either organically or via mergers and acquisitions (M&As), but this would depend on circumstances.

de Cuyper: ‘We believe it (the award of wealth management licences) may be by year-end.’caption

 

He said the insurer had concentrated on organic growth so far as it focused on the merger master plan. “If any potential acquisitions can add to our strength, fit into our financial ambitions and culture, then we may consider it.”.

The insurer targets to be the overall industry leader by 2015 through a strategy of maintaining its position as the largest takaful distributor and growing faster than the industry average for conventional life insurance.
“Based on our own extrapolation, we can be the largest insurer by 2015 by growing top line to RM7.5bil from RM4.3bil currently. That alone will be sufficient to be at the top,” de Cuyper said. The largest insurer by top line at the moment is Great Eastern Life.

De Cuyper said from now until the beginning of next year, the insurer would also be growing market share via the launch of various life and family insurance products. He said this was in line with the industry trend, which was seeing a shift towards more life and family products over general insurance. “Through Maybank's regional footprint, we can also distribute bancassurance and takaful products,” De Cuyper said. He said Etiqa was also gearing up for the award of wealth management licences under the private pension framework that was announced in Budget 2011. “We don't have any indication of when the licences will be given out but we believe it may be by year-end. We're working very hard on this,” de Cuyper said.

Source : http://biz.thestar.com.my/news/story.asp?file=/2011/10/21/business/9738557&sec=business

Takaful-focused insurer bought by run-off investment specialists

Author: Emmanuel Kenning

Source: Insurance Age | 19 Oct 2011

Randall & Quilter has agreed to buy Principle Insurance for £4.275m cash.

 

Principle has been in run-off since October 2009. It was launched and received Financial Services Authority approval in 2008 with the aim of meeting the motor and home insurance needs of the country's Muslim population as the only Shariah-compliant insurance provider in Britain at the time.
The provider, which consists of almost entirely of Takaful motor insurance business, had net reserves of approximately £2.8m on 30 June 2011. The latest available audited accounts to 31 December 2010 revealed a net asset value of £5.1m.

It is the second occasion that the company has announced a sale having previously agreed to dispose of the business to the Al Salam Group with the stated intention at the time of re-commening trading.
Tom Booth, chief financial officer at Randall & Quilter told Insurance Age that the purchase, which will be managed by R&Q Insurance Services, was a good acquisition with relatively short-tail business.
"We aim to run it off effectively and to manage and pay the claims efficiently. Then to wind the company up and extract the [remaining] capital," he said.

Ken Randall, chief executive officer of Randall & Quilter, said of the acquisition: "We are pleased to have reached agreement to acquire Principle and it demonstrates our commitment to find new legacy portfolios which meet our return criteria and have shorter anticipated run-off profiles.
"We have commented that our pipeline has grown in recent times and it is pleasing to report that this heightened activity has now resulted in a run-off company purchase, subject to regulatory approval, expected to be received in the coming months."

Randall & Quilter has a portfolio of nine insurance companies in run-off, from the UK, US and Europe, with net assets £72.2m as at 30 June 2011.

Source : http://www.insuranceage.co.uk/insurance-age/news/2118260/takaful-focused-insurer-bought-run-investment-specialists#ixzz21WanH7dm

Takaful Malaysia To Pay RM9.36 Million Dividend

October 19, 2011 20:18 PM

KUALA LUMPUR, Oct 19 (Bernama) -- Syarikat Takaful Malaysia Berhad (Takaful Malaysia) announced Wednesday its declaration of interim dividend of 7 per cent which will result in a payout amounting to RM9.36 million for its financial year ending Dec 31, 2011.

The company said in a statement dividend payments will be made on Dec 2 to depositors who transfer shares into their securities account before 4pm on Nov 11.

"The Group recorded operating revenue of RM636.2 million comprising RM532.5 million in gross contribution and RM103.7 million in investment income during the financial period ended June 30, representing an increase of 8.3 per cent over the same period last year of RM587.2 million," said Takaful Malaysia Group managing director Datuk Mohamed Hassan Kamil.

He said the Group also attained a favourable profit before zakat and taxation of RM49.9 million, representing a growth of 134 per cent over the same period last year of RM21.3 million.

On the six months financial result, Mohamed Hassan said the gross contribution was mainly attributable to its Family Takaful Group business, motor and fire class of business.

He added the company's new distribution channel, the 'Wakalah' or retail agency model launched in March 2010, was the main contributor to its Family Takaful Group business.

-- BERNAMA
Source : http://www.bernama.com.my/bernama/v5/newsindex.php?id=621065

Time to move to takaful 2.0
By Rushdi Siddiqui, Special to Gulf News
Published: 00:00 October 16, 2011

Industry must address challenges size, representative industry body, and perception.

A conference on the future and expansion of takaful, called Takaful Rendezvous 2011, took place in Malaysia under the banner of Kuala Lumpur Islamic Finance Forum (KLIFF) from October 4 to 6. Although the industry has come far in a short period of time, more needs to be done.

Much like the $640-billion (Dh2.35 trillion) halal industry, takaful needs to rise and address some of the challenges on size, representative industry body, and perception.

The known challenges in the takaful are well documented: human capital development, regulations, distribution channels, Sharia structures, governance and transparency, investment options, retakaful, and so on. Thus, at one level, takaful is encountering similar issues to Islamic finance and banking but has matured less.

Three takeaways

Today, we have, at last count, more than 177 takaful operators, predominantly in the GCC region and Malaysia. Yet this represents only single digit percentage penetration in all Muslim countries except Malaysia. The existing scenario implies three possible takeaways:

1. Muslims (in OIC countries) have yet to buy in into the takaful story on a larger scale, because existing ways and means addresses their needs. Their children and community/mosque act as de-facto ‘takaful operators'. The attitude may be: what they have is Sharia compliant and it works for their particular needs in the jurisdictions they reside.

2. The education and awareness of what takaful is, how it is compliant, and how it benefits them is a time-drawn process. It requires patient commitment and ongoing resources from the operators. The initial ‘returns' can be classified as awareness and institutional brand building, i.e., the ‘good-will' foundation for financial returns.

3. Takaful, much like the halal industry, has not ‘linked' well with the Islamic finance story, although both are very much a part of the latter. When takaful premiums are less than $10 billion and most operators are small in size, it needs to be a holistic and integrated part of the anchor story of Islamic finance.

One simple acid test is news coverage: How many takaful stories appear in the western media compared to Islamic finance? How many meaningful stories on takaful in Muslim country media vis-à-vis Islamic finance and halal industry?

Mega operator

Today, the conversation in Islamic finance is about an Islamic mega bank to offset small paid-up capital with size, to have a larger balance sheet to better compete with Islamic subsidiaries and home-country conventional banks, and to have impact on investing and financing. However, today's takaful conversation is often times on micro-takaful, much like micro-finance, to serve the under-served.

Some Muslim countries are Islamically over-banked and over-takaful compared to population size, resulting in margin-reducing (destructive) competition. If an Islamic bank or takaful operator, compared to conventional counter-parts, declares bankruptcy, it may actually result in a confidence crisis and systemic risk for the embryonic Islamic finance industry. Thus, the unique situation of ‘too small to fail' risk exists in the Islamic finance.

For example, witness the selected western media ‘frenzy' when Kuwait's Investment Dar, defaulted on its sukuk obligation or the United States' East Cameron gas sukuk went into bankruptcy.

The conversation in the takaful industry must also include establishing a mega takaful operator, either via consolidation or licence, as the status quo may not be conducive to for industry's growth and development. To offset fears of uncompetitive behaviour of larger size Islamic banks and takaful operators, there are regulations plus option of reaching out to the Sharia board, via the Sharia liaison officer or department, of such institutions for ‘anti-competitive' behaviour.

Industry body

Who is the spokesperson for the takaful industry? We have exposure to issues in takaful by industry bodies such as Islamic Financial Services Board (IFSB), and Accounting & Auditing Organisation of Islamic Financial Insititutions (AAOIFI), but a dedicated industry body is the need of the hour. The push back in certain quarters has been that it is premature to have an industry body. The same response was also articulated pre-1991 when AAOIFI was established.

The first order of business is the location of the proposed takaful industry body: the UAE or Qatar over Bahrain and Malaysia. To date, we do not have an Islamic industry body in either the UAE or Qatar, hence, an opportunity for these countries to contribute as important stakeholders in Islamic finance. Information about Islamic finance should not just be available in Bahrain and Malaysia, the two leading hubs of Islamic industry.

Global ‘go-to' point

The second and more important function of a proposed takaful industry body is what should be the role and responsibilities? It will address the well known issues, but something more is required. We need a global ‘go-to' point and clearing base of information for takaful to avoid continued fragmentation and move towards standardisation.

Thus, takaful's time has come to move towards 2.0, with stronger links to Islamic finance, where less may be better and a dedicated industry body explaining the DNA of takaful.

The writer is Global Head, Islamic Finance & OIC Countries. Opinion expressed here is the writer's own and does not reflect that of his own organisation and that of Gulf News.
 
Source : http://gulfnews.com/business/opinion/time-to-move-to-takaful-2-0-1.892539

RBC framework for takaful expected next year
Tuesday July 26, 2011

SERI KEMBANGAN: The risk-based capital (RBC) framework for the takaful industry is expected to be implemented in the first half of next year, paving the way for stricter capital requirements for Islamic insurance.

The move would enable takaful players to hold appropriate level of capital to undertake risks in their daily operations.

Takaful Ikhlas Sdn Bhd president and chief executive officer Datuk Syed Moheeb Syed Kamarulzaman said currently the exposure draft of the framework had been released and feedback was being collected from the market.

“We do not expect any delay in the implementation for the RBC framework for the takaful industry as it has been talked in the industry for a while. Unlike the conventional RBC framework, which was given a one-year period for compliance, we expect the actual execution for the RBC to be in a much shorter timeframe,’’ he told a briefing at the 1st Malaysia Insurance Summit 2011.

Moheeb, who is also the chairman of the Malaysian Takaful Association (MTA), said he was upbeat that all the takaful players would be able to comply with the framework upon its implementation.

He said there were one or two takaful companies currently “fine tuning” their portfolio to meet the framework.

Asked on the portfolio mix of the RBC for takaful compared with the RBC for conventional insurers, he said it would be slightly different as there might be heavier loans for credit-base weightage for the former resulting in higher charges for some takaful players under the takaful framework. This is in view of larger loans portfolio for Islamic finance coupled with lesser number of players in the takaful market.

The RBC framework for the conventional insurance sector came on stream in January 2009.

Under the conventional framework, insurance companies are required to have a minimum of 130% of supervisory capital-adequacy ratio.

The capitalisation of the insurance industry currently is strong at a CAR of 224.6%.

At present there are 11 takaful operators and three retakaful operators with another retakaful operator about to join the stable.

According to Moheeb, this year he expected the growth rate for the industry to exceed 20% for the family and general takaful business, higher than the previous year, with the inclusion of three new family takaful operators into the market.

Meanwhile, The Malaysian Insurance Institute (MII) CEO Khadijah Abdullah said the insurance industry as a whole was projected to grow by 12% this year supported, amongst others, by the Government’s various stimulus plans and other legislative initiatives as well as the historically low interest rate environment.

According to the Life Insurance Association of Malaysia (LIAM) that in addition to these numerous initiatives announced in the Economic Transformation Programme, including the private pension plan and worker insurance scheme, economic conditions in the country are ripe for further life insurance development.

She added the current consumer confidence in Malaysia has also shown marked improvement, rising to 107 points on the latest Nielsen Global Consumer Confidence Index - its highest score since the third quarter of 2006.

The General Insurance Association of Malaysia (PIAM) meanwhile reported that, in absence of any further adverse impacton the world economy, the association foresees the outlook for the general insurance industry this year to be positive with an increased demand for insurance in all areas.

Likewise, MTA also expects the Islamic insurance industry to continue to improve on its 10% market penetration, particularly by expanding into rural areas.

Khadijah said Malaysia and other Asean insurance markets should consider implementing the proposed Solvency II framework to be launched next year in the European Union (EU) so as to synergise the domestic industries as to be at par with other advanced markets.

This new framework would create a new scenario for the EU insurance legislations to facilitate the development of a single market in insurance services in Europe, whilst at the same time securing an adequate level of consumer protection, she noted.

Source : http://biz.thestar.com.my/news/story.asp?file=/2011/7/26/business/9169724&sec=business#13190127243991&if_height=636

RAM: Increasing demand for takaful in M’sia
Tuesday April 12, 2011

PETALING JAYA: Malaysia has successfully propelled the takaful industry to the next level, says RAM Rating Services Bhd.

Driven by increasing demand, the takaful industry has evolved from one that only contained a single player with limited basic products to a viable sector that has been integrated into the mainstream financial system, the rating agency said in a statement yesterday.

“While not as prominent as the overall Islamic banking industry, takaful is marching ahead at its own pace with a 20% to 26% year-on-year growth in terms of total assets and contributions between 2004 and 2009,” it said.

According to the agency’s head of Islamic ratings Zakariya Othman, the Government has been the major force behind the domestic growth of takaful and its success.

He said Malaysia’s established regulatory and legal frameworks have given the country an edge over other jurisdictions.

“The industry’s strong syariah framework helps nurture consumer confidence and also provides greater flexibility to takaful operators, encouraging them to be innovative within the boundaries of syariah,” he explained.

Despite the clear domestic and global growth of the takaful industry, however, Zakariya noted that there were still concerns and challenges that could hinder industry operators’ efforts to become prominent players in the financial realm.

One of the lingering concerns, he pointed out, involved liquidity, and the other was the lack of long-term instruments.

“Takaful operators need to match their long-term liabilities with long-term assets, to be able to expand their array of products and business propositions,” he said.

Source : http://biz.thestar.com.my/news/story.asp?file=/2011/4/12/business/8462960&sec=business#13188378846371&if_height=404

Robust and a world leader in the Islamic way
Friday October 7, 2011

ON July 1, 2011, the Shariah Governance Framework was implemented to further strengthen the oversight role, authority, accountability, independence and competency of the Board of Directors, the Shariah Committee and the Management of the Ismanic financial institutions on shariah matters.

Two Islamic indexes were launched in the first half of 2011, namely the Bloomberg Malaysian Foreign Currency Sukuk Index and Bloomberg-AIBIM-Bursa Malaysia Sovereign Shariah Index.

The first is a non-ringgit denominated index developed in conjunction with Bank Negara, which provides a global benchmark for the performance of sukuk and the ability to track movements of foreign currency issuances.

The second index is a collaboration between Bloomberg Association of Islamic Banks in Malaysia and Bursa Malaysia, which provides a performance benchmark for shariah compliant ringgit denominated Government securities to investors.

As at end July 2011, 847 shariah-compliant securities were hosted on Bursa Malaysia, representing 89% of total listed securities with a market capitalisation of RM826bil or 61.7% of total market capitalisation (end 2010: RM756.1bil; RM59.3%).

The trading volume of shariah-compliant securities rose to 111.5bil units or 59.4% of the total 187.7bil units traded during the first seven months of 2011 (Jan - July 2010: 88.5bil units; 66.4%; 133.9bil units.

Malaysia remained a leader in the global sukuk market outstanding as at end of the first half of 2011.

Bursa Malaysia is also the top sukuk listing destination, with 19 sukuk totalling RM88.3bil as at end July 2011 (US$29.6bil).

During the first seven months of 2011, one Islamic fund management licence was approved, bringing the number of full-fledged Islamic fund management companies to 16 (end 2010: 15 companies).

During the same period, eight Islamic unit trust funds were launched, reaching a total of 160 funds set up with a total net asset value of RM26.4bil as at end July 2011 (end 2010: 152 funds; RM24bil).

Total Islamic wholesale funds launched stood at 24 with an additional five funds launched during the first seven months of 2011 (end 2010: 19 funds).

The size of the Islamic wholesale funds in terms of net asset value (NAV) was RM7bil as at end July 2011 (end 2010: RM4.2bil).

Meanwhile, one Islamic exchange traded fund is listed with a NAV of RM579mil (end 2010: 1 ETF; RM626mil) while Islamic real estate investment trusts (REITs) stood at three with a market capitalisation of RM2.5bil as at end June 2011 (end 2010: 3 REITs; RM2.3bil).

The takaful industry continued to grow in the first seven months of 2011 underpined by increased domestic economic activities.

Assets of the takaful industry grew 16.8% to RM16.3bil, accounting for 8.7% of total assets in the insurance and takaful sector (Jan - July 2010: 19.5%; RM13.9bil; 8.3%)

New business contribution for family takaful declined slightly by 1.1% to RM1.58bil (Jan - July 2010: 25.8%; RM1.59bil), due to lower contributions in endowment products.

However, market penetration rate of family takaful improved to 12.1% as at July 2011 (end 2010: 10.9%)

For the general takaful sector, gross direct contributions increased 18.1% to RM917.5mil (Jan - July 2010: 27.6%; RM776.7mil) due to higher contributions from motor and medical businesses.

However, operating profits for the sector declined 32.7% to RM103.6mil (Jan - July 2010: RM154mil) due to higher net claims incurred mainly in the motor class business during the period.

Source : http://thestar.com.my/news/story.asp?file=/2011/10/7/ecoreport/9642040&sec=ecoreport 

Maybank to keep lead in takaful
Friday July 25, 2008

KUALA LUMPUR: Malayan Banking Bhd (Maybank) is confident of maintaining its position as the largest takaful operator in Malaysia after receiving good response for its latest product, Takaful Al-Waqi.

From left: Maybank executive vice president head bancassurance Ibrahim Muhammad, Etiqa Takaful Berhad chief financial officer/executive director Hans De Cuyper and Etiqa Takaful Berhad deputy chief executive officer Amirudin Abdul Halim during the launch

Since the soft launch on Monday, it has collected about RM30mil subscription from investors. Etiqa Takaful Bhd, the insurance and takaful division of Maybank, is in charge of distributing the fund.

Maybank executive vice president, head Bancassurance Ibrahim Muhammad said 95% of subscribers were individuals and the rest from institutions.

“We are confident that in two to three weeks time, the institutions will come in. We believe within this month, the whole fund totalling RM200mil will be fully subscribed,” he said during the launch yesterday.

Takaful Al-Waqi is a short tenure investment of two years with potential upside of 8.81% per annum. About 90% of the fund will be invested in shariah-compliant fixed income investments. The rest will be invested in shariah-compliant investment instruments that are referenced to the performance of an optimised commodity index for potential upside returns.

Etiqa Takaful deputy chief executive officer Amirudin Abd Halim said the fund needed to be invested according to what was allowed in Islamic law.

“We choose four broad-based commodity baskets members - energy, industrial metals, precious metal and agriculture sector - as they are all shariah-compliant,” he said.

Chief financial officer/executive director Hans De Cuyper said commodities, such as metals, were in demand.

“The rising of China and India as industrial players commands a huge demand for metals for their development.

“That's why we are investing in commodities, as they are not really affected even during economic softening,” he said.

Takaful Al-Waqi, which is open to customers aged 18 to 70 with a minimum single investment of RM20,000, is available at its 21 Etiqa Takaful branches.

Source : http://biz.thestar.com.my/news/story.asp?file=/2008/7/25/business/21914704&sec=business

Maybank unit eyes RM14mil premium from new product
Saturday August 9, 2008

KUALA LUMPUR: Malayan Banking Bhd's (Maybank) insurance and takaful arm, Etiqa, is eyeing RM14mil in premiums from its newly launched BizPac.

It hopes to achieve this by riding on the growing number of small and medium enterprises (SMEs) in the country.

“According to Ministry of International Trade and Industry, there are about 590,000 SMEs in Malaysia,'' said executive vice-president (enterprise corporate), Shahrul Azuan Mohamed, at the launch of BizPac yesterday.

“It is a big market that we want to tap together with Maybank and provide the necessary support to protect the businesses and interests of the SMEs.”

BizPac is a package for SMEs involved in the manufacturing industry. It is a financial solution designed to assist proprietors manage their business and be protected in the event of unfortunate incidents.

“We provide real-time response which allows proprietors to assess their premium upfront using a single-premium methodology (where premium is computed as a single sum and will result in less documentation).

“With this feature, it provides the convenience to proprietors as it gives instant information on their premium to assist and expedite their decision and the convenience of a single-proposal form for their various insurance classes,” he said. – Bernama

Source : http://biz.thestar.com.my/news/story.asp?file=/2008/8/9/business/22041930&sec=business

BNM: Takaful players should invest in technology, distribution channels
Posted on October 7, 2011, Friday

KUALA LUMPUR: Takaful players must invest in technology, people and distribution channels as strategies to enhance their ability to tap the cross-border takaful business, Bank Negara Malaysia’s (BNM) assistant governor Bakarudin Ishak said yesterday.

He said strong global gross takaful contribution growth trends, averaging about 31 per cent, had been forecasted to hit US$12 billion (US$1=RM3.11) by year-end from US$7 billion in 2009.

“This signifies positive growth potential in years to come, particularly to the present very low rate of takaful market penetration,” he said in his keynote address at the Takaful Rendezvous 2011 here yesterday.

Bakarudin said takaful and retakaful markets’ potentials were recognised by major conventional players as evident by the setting up of takaful or retakaful companies within a number of large conventional groups from the US, UK and Germany.

He said takaful operators, who numbered more than 150, were set to increase, thus reinforcing the competitive element in the takaful business. Being the world’s largest takaful market, Malaysia has a strong presence in the takaful market globally, with total assets worth US$3.2 billion that dominated 26 per cent of the total global takaful assets in 2009.

The domestic takaful industry’s healthy growth and strong performance, with a compound average 27 per cent growth in terms of net contribution between 2005 and 2010 illustrated the increase in takaful coverage as the preferred option.

Moving forward, Bakarudin said the takaful industry had to seek the best solutions to propel its growth at a faster pace.

He said efficiency strength could be achieved through investments in systems and technology.

“A more advanced back-end system and up-to-date structured information retention and data mining system will allow operators to conduct more comprehensive analysis to understand its target market better,” he said.

Given the current culture of consumers who leveraged on information technology in their daily lives, takaful operators might also further develop the systems to facilitate this.

Bakarudin said investments in people would secure continuous success of the takaful industry and like other financial services providers, takaful operators have to invest in efficient and cost-effective distribution channels. — Bernama

Source : http://www.theborneopost.com/2011/10/07/bnm-takaful-players-should-invest-in-technology-distribution-channels/

Etiqa Takaful Berhad "The Most Outstanding Takaful Company, Four Years In A Row"

Kuala Lumpur – Etiqa Takaful Berhad was awarded as ‘The Most Outstanding Takaful Company’ during the KLIFF Islamic Finance Awards 2011 at Istana Hotel recently, making it the fourth year in a row for Etiqa Takaful Berhad to be the winner of this accolade since 2008.

Shahril Azuar Jimin, Chief Executive Officer of Etiqa Takaful Berhad receiving the Most Outstanding Takaful Company award from Y.B. Tan Sri Nor Mohamed Yakcop, Minister in the Prime Minister’s Department and witnessed by Abdul Aziz Abdul Jalal, Director of Kuala Lumpur Islamic Finance Forum and Mohd Redza Shah Abdul Wahid, Chief Executive Officer of Bank Muamalat Malaysia Berhad.

On hand to receive this prestigious award from Y.B. Tan Sri Nor Mohamed Yakcop, Minister in the Prime Minister’s Department, was Shahril Azuar Jimin, Chief Executive Officer of Etiqa Takaful Berhad. The ceremony was witnessed by Abdul Aziz Abdul Jalal, Director of Kuala Lumpur Islamic Finance Forum (KLIFF) 2011. 

“Winning this award is indeed a strong testimony of Etiqa Takaful’s leadership in the takaful market. What is even more encouraging is the fact that we have won this for four consecutive years from 2008 to 2011,” said Shahril.  

The KLIFF Islamic Finance Awards is meant to honor, recognize and acknowledge the significant effort and contributions of individuals and institutions in developing the Islamic finance industry. “The group’s effort of positioning the Etiqa brand in the forefront of the insurance and takaful industry is indeed the winning factor. More importantly, Etiqa Takaful Berhad is the first takaful operator to have reached the contribution mark of RM 2 billion (USD 700 million) which is believed to be the highest in the world for a direct takaful writer,” commented Hans De Cuyper, CEO of Etiqa Insurance and Takaful.

More than 500 Islamic finance leaders from all over the world attended the awards presentation dinner last night where more than 10 categories of awards were given out in recognition of outstanding performance and development in the Islamic banking and finance field.

Most Outstanding Takaful Company award: (from left) Hans De Cuyper, Chief Executive Officer of Etiqa Insurance and Takaful and Shahril Azuar Jimin, Chief Executive Officer of Etiqa Takaful Berhad

“Since the launch of the Etiqa brand in November 2007 with the brand platform of humanizing insurance and takaful, we have taken every effort to ensure that the brand is cascaded to every single member of the Etiqa family. Our attributes are encapsulated in our behavior, work culture, how we treat our customers, even to the extent of our products and services. We have simplified processes and empowered our people to give customers positive experiences when dealing with us. This is the Etiqa difference,” added Shahril.

Kuala Lumpur Islamic Forum (KLIFF) has been held annually since year 2004 and the 8th KLIFF 2011 is currently held at Istana Hotel, Kuala Lumpur between October 3rd – 7th, 2011 to offer an integrated basis for promoting Islamic financial system dialogue among speakers and delegates to foster the orderly development of an efficient, competitive, sound and innovative Islamic finance.

Source : http://www.etiqa.com.my/English/Pages/default.aspx

Takaful market set to grow in S. Africa and beyond

By MUSHTAK PARKER | ARAB NEWS
Published: Sep 18, 2011 23:37 Updated: Sep 19, 2011 16:01

Another sign that the mainstream banks in South Africa are taking Islamic finance as a serious niche market business is the acquisition last week of the local Islamic insurance company, Takafol SA, by Absa, one of the republic's largest banking groups.

In a deal which could have implications for the reach of Takaful (Islamic insurance) beyond the borders of South Africa to southern, central, West and East Africa, Absa Insurance Company Limited (AIC), a wholly-owned subsidiary of Absa Financial Services Limited (AFS), bought the book of business of Takafol South Africa (Pty) Limited (Takafol SA), which is a subsidiary of the Hannover Reinsurance Group, a major global reinsurer, and which was established in 2003.

The Takaful premium market in South Africa is currently estimated at about 3 billion South African rands (about $420 million), which is very modest compared to the conventional insurance market. As such market penetration potential is huge because of the low base, especially in country with a fast growing population of over 45 million of which only about 3 million are Muslim, but with a relatively largish affluent Muslim middle class.

Islamic banking has been around in South Africa since 1989, when Albaraka Bank South Africa, now a joint venture between the Saudi-owned Albaraka Banking Group and UK-based DCD London & Mutual Plc, was licensed by the Reserve Bank of South Africa, the central bank. Over the last decade or so, the mainstream banks in South Africa, where banking is a lucrative business because of some of the highest banking charges in the world, have started to show interest in offering Shariah-compliant products initially at home and now increasing in Sub-Saharan Africa as far as Nigeria and Tanzania.

They include First National Bank (FNB); ABSA, in which Barclays Bank Plc of the UK has a 55.5 percent stake; Nedbank and Standard Bank - all of which have thriving Islamic banking windows and which have overtaken Albaraka Bank SA in terms of book business and branch reach. Albaraka Bank SA for instance has only 11 branches in the country, including the headquarters. Not surprisingly, Albaraka Bank SA has an agreement in place with Standard Bank and Absa whereby its customers can deposit funds into their accounts via Absa or Standard Bank branches.

Banks such as Absa and Standard Bank have clear strategies of growth and expansion beyond South Africa to sub-Saharan Africa, and Islamic banking and insurance are an attractive component of this offering especially in countries with large and affluent Muslim populations.

At the same time banks offering Islamic financial products in the “rainbow republic” are encouraged by the increasingly proactive policy of the South African government of President Jacob Zuma, toward the facilitation of Islamic finance in the country under financial inclusion policy and other reasons.

The South African National Treasury has introduced tax neutrality measures for Mudaraba, Murabaha and Diminishing Musharaka products and emphasized that "the development of Islamic finance in South Africa is critical to the expansion of National Treasury's strategy to position South Africa as a gateway into Africa. The Treasury envisages South Africa being a central hub for Islamic product development and ensuring the rollout of such products into African markets."

South African Finance Minister Pravin Gordhan, introducing the Taxation Laws Amendment Bills 2010 in the National Assembly in Cape Town in August 2010, gave further insight into the government's rationale for the tax changes relating to the Islamic financial products.

"South Africa is an ideal location for multi-nationals to base their regional operation for investments into sub-Saharan Africa. South Africa offers world-class financial services, strong and clear financial regulatory architecture and world-class infrastructure ... Certain domestic tax anomalies, the exchange control regime and fierce competition from certain low tax countries, remain stumbling blocks to South Africa taking full advantage of the opportunities that are available. An important area of innovation relates to the growing use of Islamic financing, which contains certain prohibitions in respect of finance, including prohibitions against interest, immoral substances and the lack of transparency in respect of investments. At issue is the tax system's lack of recognition of Islamic finance, as it mainly focuses on traditional forms of finance. The proposed amendments will level the playing field in respect of certain Islamic financial products when undertaking savings and investments and when attempting to bank finance," explained Gordhan.

Standard Bank and Absa are spearheading this Islamic finance foray into the African continent. In July the Central Bank of Nigeria, for instance, gave approval to Stanbic IBTC Bank, the Nigerian subsidiary of Standard Bank, a license to set up an interest-free Islamic banking subsidiary subject to complying with the approval terms within six months. In Tanzania, Standard Bank has also launched a number of Islamic consumer finance products including Islamic mortgages, leasing, business account facilities and Takaful.

Absa at the same time has an established and dedicated Absa Islamic banking brand and window. With the acquisition of Takafol SA, which is awaiting final approval from the banking and insurance regulator, Absa is keen to build an additional brand, Absa Takaful.

In fact, Takafol SA has a history with the Absa Group through its underwriting relationship with Absa Insurance Company Limited (AIC). In 2008, Takafol SA appointed AIC their underwriting partner and this relationship, according to both parties, contributed to Takafol SA's further development, with personal lines and commercial business growing by more than 66 percent over the next two years.

Takafol SA offered short-term Takaful for business, vehicle, personal and household cover. The merger of Takafol SA into AIC will bring many economies of scale including direct control over underwriting and pricing, and greater clarity and certainty in terms of global standards of Shariah governance.

Absa Takaful will be headed by Uwaiz Jassat, Takafol SA's CEO, who will report to Edwyn O'Neill, managing director of Absa Insurance Company. At the announcement of the acquisition, O,Neill emphasized that "this deal demonstrates Absa's commitment to provide the Islamic community with a holistic financial services offering that is Shariah-compliant. Today, we cement our relationship with the Islamic community and recognize that there is a need for similar products in the rest of Africa."

Takaful provision in South Africa is so underdeveloped and incestuous that other banks such as Albaraka SA offers Takaful services to it clients through its association with Takafol SA. Albaraka Bank SA has close relations with Absa, which also manages its Islamic equity fund offerings.

However, this may also be a cue for Takaful providers from abroad to think about using South Africa as a gateway to spearhead Takaful business into new markets in Sub-Saharan Africa.

Source : http://arabnews.com/economy/islamicfinance/article503525.ece

Etiqa Takaful Launches Four New Insurance Products

KUALA LUMPUR, Sept 30 (Bernama) -- Etiqa Takaful Bhd's newly-launched products -- Harmoni, Intelek, Prisma and Prisma+ -- aim to provide comprehensive protection and savings benefit for all stages of life.

In a statement, Etiqa Insurance and Takaful chief executive officer, Hans de Cuyper, said the products were created for those who wanted to make their life easier knowing they had good and comprehensive protection and savings benefits throughout their lives.

"This is very much in line with the Etiqa brand platform of humanising insurance and takaful, where we continue to make insurance and takaful simpler for everyone," he said.

de Cuyper, who is also the company's executive director, said these products were not only simple to understand but were simple to be obtained.

Harmoni helps provide protection and savings from just RM70 contribution a month. It allows the policyholders to withdraw some of the money from the Participant Investment Fund should they require it for things that matter.

Prisma secures the family's financial future by providing substantial cover from just RM50 contribution a month.

Prisma+ protects against life's uncertainties by offering a sizeable financial cover as well as the advantage of accruing cash from just RM50 contribution a month.

Intelek builds a sizeable fund for children's education needs as well as providing protection from just RM70 a month.  It rewards children financially on their achievements in major examinations.

-- BERNAMA

Source : http://www.bernama.com.my/bernama/v5/newsbusiness.php?id=616953