Takaful / Insurance

Exclusive - #Malaysia's Maybank prepares to spin off and list #insurance unit: sources

Malayan Banking (Maybank) is preparing to spin off and list its Etiqa insurance arm on the local stock exchange. Etiqa operates in Malaysia, Singapore, the Philippines and Indonesia and is estimated to be worth at least $1 billion. As part of the transaction, Maybank’s investors are expected to receive shares in the insurance company in proportion to their existing holding in the bank. Etiqa provides life and general insurance as well as family and general takaful. In 2017 Eitqa reported a record revenue of 6.2 billion ringgit ($1.6 billion). Profit before tax rose 18.5% to 1 billion ringgit last year. In March, Etiqa said it maintained its top position in Malaysia’s general insurance and general takaful segment with an 11.8% market share. It was ranked fourth in the life and family segment, with an 8.9% market share.

London’s #takaful standards seeking Shariah scholars’ approval by year-end for 2019 roll-out – industry association

London’s draft standards for transaction of Islamic commercial insurance are seeking Shariah scholars’ approval this year for roll-out next year. The Islamic Insurance Association of London (IIAL), which counts Lloyd’s of London as a founding member, has sought Shariah and legal opinion for the standards framework it has developed. The planned roll-out of IIAL’s takaful standards will more or less coincide with the UK’s departure from the European Union on March 29 next year. According to IIAL secretary-general Jon Guy, lots of managing general agents (MGAs) will target UK retail takaful because they will have the ability to access Shariah-compliant capital. Once the syndicates have gone through the regulatory and administrative setup, they will be very keen at looking at how they can deploy it.

Allianz still keen to acquire #takaful business

Despite a failed merger with HSBC Amanah Takaful a year ago, Allianz Malaysia is still keen to acquire a takaful business. According to Allianz CEO Zakri Khir, there is bright takaful business growth potential because the penetration rate in Malaysia is just 15%. Allianz Malaysia has recently sealed a partnership with insuretech start-up PolicyStreet to offer potential clients to purchase insurance policies online. Four Allianz digital products will be offered on PolicyStreet’s digital platform namely Enhanced Road Warrior, Smart Home Cover, Allianz Travel Care and Allianz Flight Care. In 2017, Allianz Malaysia's profits fell 7.7% to RM287.96 million from RM312.13 million on the back of 2.6% rise in revenue from RM4.68 billion to RM4.8 billion. Zakri said Allianz Malaysia was impacted by Bank Negara's detariffication of motor and fire insurances from July 1 2017.

#Malaysia central bank to launch revised #takaful operational framework

Bank Negara Malaysia (BNM) plans to revise its takaful operational framework. Governor Tan Sri Muhammad Ibrahim said the revised framework would be published for consultation before the middle of the year. He said it would strengthen the governance of takaful operators, including how takaful funds are managed, to further safeguard the interest of takaful participants. On the objective of 25% family takaful penetration by 2020, he said it was ambitious, but achievable. Muhammad noted that the industry was lagging in terms of migration to e-payments. He added that another area that is wide open for innovation was the integration of takaful with elements of waqf, sadaqah and zakat.

A.M. Best Affirms Credit Ratings of #Qatar Islamic #Insurance Company Q.S.C.

A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Qatar Islamic Insurance Company (QIIC). The outlook of these Credit Ratings is stable. QIIC adopts a hybrid takaful model, whereby the shareholders’ fund (SHF) charges the policyholders’ fund (PHF) a Wakala fee based on gross written contributions (GWC) and a Muderaba fee based on investment income. QIIC has a track record of strong operating and technical profitability, highlighted by a five-year average combined ratio of 79% that has remained very stable over recent years. Although the company is concentrated to its domestic market of Qatar, the company maintains a niche market position as an established provider of Shari’a compliant products.

#Retakaful sector remains embattled playground for Islamic finance

According to insurance rating firm A.M. Best, retakaful is faced with a challenging environment in a highly competitive reinsurance market. The analysts took a close look at the global retakaful market and found that new companies entered the market, but their success has been limited. Mahesh Mistry, senior director of analytics at A.M. Best, says that companies have limited access to quality business, predominantly resulting from the underperformance of the primary takaful sector. Current leading players in the retakaful market are Malaysia’s ACR Retakaful and Malaysian Reinsurance, Emirates Retakaful, Saudi Reinsurance Company, Dubai’s Takaful Re Limited and Tunisia’s BEST Re, as well as Islamic windows of conventional insurers. It is estimated that the entire business volume does not exceed $1bn in gross written premiums, while the global reinsurance market was valued at close to $600bn at the end of last year. The standalone retakaful model may be under threat over the long term, unless it is repositioned to add additional value to the reinsurance market

#Qatar Islamic #Insurance posts gain in gross written premium to QR316.6mn in 2017

Qatar Islamic Insurance has reported more than 1% year-on-year rise in gross written contribution (premium) of QR316.6mn in 2017. The company’s earnings-per-share was QR4.13 compared to QR4.23 a year ago. The policyholders’ surplus registered more than 100% growth to QR16.2mn in 2017 compared to QR7.9mn in the previous year. Chairman Sheikh Abdulla bin Thani al-Thani said the company would distribute, for the eighth consecutive year, 20% surplus to all the eligible policyholders for 2017. The management of Qatar Islamic Insurance achieved these results despite a very challenging environment in 2017 due to negative impact of low oil prices on national economy.

#Insurtech #Malaysia: Volume 2, The Start-Up Edition

In this interview, two product aggregator start-ups, Jirnexu and Fatberry, are discussing their experiences in collaborating with carriers and regulators. Jirnexu is currently in the BNM Regulatory Sandbox and this way gets great support from the regulator. The regulatory sandbox has a customer-focused vision and uses its technology to help with communication, education and purchasing of Insurance. Fatberry is focused on the General Insurance space. It aims at focusing on the customer’s needs and pain points when building its solutions.

Why Nigerians need to embrace #Takaful insurance

In this interview Momodou Musa Joof, CEO Jaiz Takaful Insurance, shares his experiences managing firms and enterprises offering Islamic insurance. Joof believes that Takaful establishment in Nigeria benefits the economy tremendously by creating employment, settling genuine claims and insuring insurable risks. When there is surplus or profit, Takaful insurance, especially Jaiz Takaful Insurance distributes it back to the participants who have not suffered losses. This way, it forms part of poverty alleviation and has nothing to do with Islamising Nigeria, as some people believe. Jaiz Takaful Insurance operates with two distinctive accounts: Participants’ Account and Management’s Account. 70% of contribution goes to the Participants’ Account while 30% goes to the Management’s Account. Takaful is expected to pay genuine claims faster since claims are paid from the Participants’ Account the surplus of which goes for distribution at the end of business year. Out of the amount which goes for distribution, a prescribed ratio is always paid to the needy (Zakat).

#Takaful industry sees rapid growth

The Takaful industry is expected to see rapid growth thanks to consolidation and regulatory improvement. The December 2017 acquisition of Al Hilal Takaful by Takaful Emarat in the UAE has attracted international attention to the market potential of the sector and to the obvious necessity for consolidation. Takaful Emarat managing director Mohammad al-Hawari said that after the merger a combined digital platform would provide more efficient and cost-effective services. In the UAE there are 34 domestic and 27 foreign conventional and Islamic insurance companies. Like in the UAE, Saudi Arabia’s insurance market remains largely fragmented, with 33 listed Takaful operators competing against each other. Saudi Arabia, the UAE, Bahrain, Oman and Qatar have already introduced new regulations specific to the Takaful industry, while Kuwait has a new insurance law draft. The future potential of Takaful in the GCC is driven by the reduction of state benefits.

#Takaful #Malaysia to leverage on #digitalisation after high returns

Takaful Malaysia aims to expand its market share in the general takaful business after recording higher turnover and earnings for its 2017 fiscal year. The company increased its revenue by 6.5% to RM2.14 billion year-on-year due to the higher sales in the family and general takaful businesses. Group CEO Datuk Seri Mohamed Hassan Md Kamil said the company maintained its lead position in the family takaful segment and the fire and motor classes’ gross contribution shot 20% up from FY16 to close at RM591 million. He added that Takaful Malaysia is also in the middle of enhancing its digital capabilities. Significant investment has been made in tools, applications and new technologies to improve operational efficiencies and enhance the customer experience. The takaful operator surpassed the RM200 million mark for the first time since its inception in 1984, growing at a compounded annual growth rate of 27%.

#Takaful #Malaysia plans new products to boost boost growth

Takaful Malaysia plans to introduce new product solutions to improve its growth rate. The company said it made significant investments in tools, applications and new technologies to improve operational efficiencies and customer experience. For the fourth quarter ended Dec 31, 2017, Takaful Malaysia’s net profit stood at RM56.3 million, 43.4% higher than the RM39.26 million recorded in the previours period. Revenue increased 5.5% from RM490.82 million to RM517.74 million. Its full-year net profit soared 17.3% from RM176.28 million to RM206.7 million, with revenue rising 6.3% from RM2.01 billion to RM2.14 billion. Takaful Malaysia group CEO Datuk Seri Mohamed Hassan Kamil said the group’s profit surpassed its target and for the first time exceeded RM200 million since its establishment. He added that the group takaful business and general takaful gross contribution grew 20% from the previous financial year to close at RM591 million, mainly derived from the fire and motor classes.

Microinsurance is Insurance for emerging customers and it’s a huge market opportunity

In this interview Peter Gross from MicroEnsure talks about Microinsurance and Microfinance. He defines microinsurance as insurance for emerging customers. These types of products are specifically designed for an underserved population that typically can’t get access. MicroEnsure is a specialist provider of Insurance for customers in emerging markets and has registered over 55 million customers in 10 different countries in Asia and Africa. MicroEnsure partners with over 70 different insurers. Their biggest shareholder is AXA, alongside Omidyar Network, IFC and South Africa’s Sanlam. For distribution, the products need to be able to be offered and distributed through the masses. Making an easy to purchase process over mobile or other e-platforms is critical. From an operational perspective, MicroEnsure needs to assume a lot of mistakes on the data input from the consumer. MicroEnsure’s technology is fully API-enabled and can be easily plugged into their distribution partners.

Global #takaful market to gain traction as consolidation sets in

The global takaful industry is expected grow significantly thanks to consolidation and regulatory improvement in some countries. The December 2017 acquisition of Al Hilal Takaful by Takaful Emarat in the UAE has attracted international attention for the market potential of Islamic insurance, but also the obvious necessity for consolidation. In the UAE there are no less than 34 domestic and 27 foreign conventional and Islamic insurance companies touting for a customer pool of just 10.5mn people. Saudi Arabia’s insurance market is also largely fragmented, with 33 listed takaful operators competing against each other. Saudi Arabia, the UAE, Bahrain, Oman and Qatar already introduced new regulations specific to the takaful industry, while Kuwait has a new insurance law draft. The Gulf Cooperation Council (GCC) is the largest market for takaful industry, the second-largest chunk is mainly spread over Malaysia, Indonesia and Brunei. The future potential of takaful in the GCC is certainly driven by the reduction of state benefits which increases demand for products such as life and health insurance.

Al Madina #Takaful names new CEO

#Oman's Al Madina Takaful announced the appointment of Usama Al Barwani as chief executive officer (CEO). Al Barwani was the acting CEO. He was one of the key people involved in transforming the company from a traditional insurance company into Oman’s first takaful insurance company. With a strong track-record of success, the company was recently awarded the Best Arab Company in the insurance category and he was also the recipient of the Best Arabian 100 CEO Award. Al Barwani has a degree in Strategic Management and Leadership ED (CMI) and has a Post Graduate Diploma in HRM in Information System Management and Education (CABA, Canada).

Great Eastern #Takaful appoints Shahrul Azlan as new CEO

Great Eastern Takaful has appointed Shahrul Azlan Shahriman as its new Chief Executive Officer (CEO). Shahrul Azlan was the Chief Distribution Officer in Prudential BSN Takaful, with local and international experience in multichannel distribution. Great Eastern Takaful Chairman, Datuk Kamaruddin Taib said Shahrul Azlan was the best person to steer the company given his vast experience and established track record. He added that in Malaysia there was tremendous potential for Great Eastern Takaful to serve the underinsured and fast-growing Islamic insurance market in the country.

#UK Firm Launches Sharia-Compliant Home #Insurance

Green Dome Financial Services has launched the UK's first Sharia-compliant home insurance policy. The company has begun selling policies that meet Islamic restrictions on uncertainty and usury, or unreasonably high interest rates, while falling within the scope of the U.K.’s Financial Conduct Authority.

Islamic #insurers to #refocus on profitable segments

Improving insurance profitability is expected to result in Islamic insurance players refocusing their sectors. According to Moody’s analyst Mohammad Ali Londe, the motor and medical insurance sector have benefited most from the recent premium rate increases in Saudi Arabia and UAE. Therefore, Moody's expects Takaful operators to refocus their underwriting and servicing operations on these lines. Previously, weak underwriting results in the core medical and motor lines forced Takaful insurers to widen their product offerings. GCC Takaful insurers’ results for the first nine months of 2017 reveal that underwriting profitability has improved in most countries. In UAE, motor premium rates rose in 2017 as a result of the country’s new unified motor policy which provides standardised coverages. The improvement in Takaful insurers’ underwriting profitability has started to reverse the previous deterioration in their capital adequacy.

#Kano Gets First Islamic #Insurance Services

Islamic insurance services were formally launched yesterday in Kano, Nigeria. The launching ceremony of Jaiz Takaful Insurance was held at the premises of the palace of the Emir of Kano. The managing director of Jaiz Takaful Insurance, Mahmud Moussa Joof disclosed that the sector has currently recorded 25 to 35% global growth. He added that Takaful insurance was open to everybody as against contrary insinuations from certain quarters. At the ceremony, the Emir of Kano, Muhammad Sunusi II lamented over the faulty payment system by insurance service providers in Nigeria. The Emir urged operators of the Islamic Insurance business to be honest to Kano people, while urging Kano people to form cooperative groups to access the Islamic insurance services, affirming that, subscribing to insurance services is permissible in Islam.

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