Takaful / Insurance

Huge rise in GCC sovereign issuance to support Takaful stability

According to Kuwait Finance Centre Markaz the Middle East will see $58 billion in bond and Sukuk issuance in 2016 and $385 to $390 billion through 2020. The excess allocation towards real estate has been exasperated by the shortage of Shari'ah-compliant fixed income. The next few years may be challenging for the GCC and its Takaful companies if energy prices stay low because the low penetration rate of insurance and Takaful has led to an extremely competitive market. A pipeline of around $60 billion per year for the next five years will support banks and Takaful operators to manage their balance sheets and support growth.

NIC to introduce Islamic based insurance program

In Ghana the National Insurance Commission (NIC) may soon introduce Islamic based insurance known as Takaful insurance. The Commissioner of Insurance Lydia Lariba Bawa said in places where the Muslim population is higher like Gambia and Nigeria, Takaful insurance is gaining grounds. There is a Muslim community in Ghana that can be adressed by introducing the Takaful insurance. This move will contribute to the Commission’s effort to increase insurance penetration in the country.

Hong Leong MSIG Takaful CEO Quits

Wan Mohd Fadzlullah Wan Abdullah, CEO of Hong Leong MSIG Takaful (HLMT), a joint venture between Hong Leong Financial Group Malaysia and Japan’s Mitsui Sumitomo Insurance has resigned from the Islamic insurer. According to reports, Fauzi’s exit could have something to do with a dispute over HLMT’s future strategic directions with HLA Holdings, which is part of Hong Leong Financial Group Malaysia and owns a 65% stake in HLMT.

Takaful’s family unit chalks up rapid contribution growth

Syarikat Takaful Malaysia Bhd (STM)’s first financial quarter ended March 31, 2016 (1QFY16) net profit was in line with their expectations, accounting for 24% of the full-year forecast. The positive takeaway from the 1QFY16 results was a swift expansion of 14.4% year-on-year (y-o-y) in gross earned contributions (GEC) to RM426.8 million. This emanated primarily from its family takaful unit, which chalked up a growth of 21.8% y-o-y in its 1QFY16 GEC (mainly from mortgage-related products).

Qatar’s new insurance instructions credit positive: Moody’s

The recent instructions issued by the Qatar Central Bank (QCB) for insurers operating in Qatar are credit positive. These instructions are related to licensing, regulations and controls, risk management, accounting and actuaries reports. The instructions include prudential requirements and took effect this month. Insurers that will benefit from the new law include the largest Qatari insurance groups: Damaan Islamic Insurance Company, Qatar Insurance Company, Qatar General Insurance & Reinsurance Company, Doha Insurance Company, Al Khaleej Takaful Group and Qatar Islamic Insurance Company.

GCC sovereign issuance can be hugely instrumental for takaful stability

The 11th annual World Takaful Conference concluded its two-day proceedings, following the launch of an intelligence report by the forum’s conveners, Middle East Global Advisors. "The Finance Forward World Takaful Report: Connecting the Dots, Forging the Future" was launched as part of WTC’s commitment to supporting the Takaful industry. The Report provides a way forward to addressing various challenges ranging from price wars and pricing regulation, to closing the gap of human capital, and includes contributions from UK & Netherlands-based boutique consultancy, Takaful Outsource. The 12th annual edition of WTC will take place in April 2017.

Qatar tops Middle East in penetration of Islamic insurance

The Islamic insurance penetration in Qatar far exceeded that in the Middle East, where lack of differentiation and associated pricing pressure, along with poor distribution networks, are key challenges for the takaful companies, though the region made the early moves to establish Islamic insurance, according to A M Best. The overall penetration figures for the Middle East mask underlying differences between various countries in the region with Bahrain and Qatar both enjoying good takaful penetration rates of 22% and 13%, respectively compared to the Middle Eastern average of 8% in 2014, A M Best said in a report ‘Takaful Life and Nonlife Issue Review’.

Shariah-compliant New Islamic Insurance Law of Oman

Delhi-based Transworld Consultants, a company specialising in laws in the Gulf states, has come out with an English version of the New Islamic Insurance Law of Oman. According to the Chief Executive Officer of Transworld Consultants, Syed Saami Mahmood, the new 58-article Law provides that the companies conducting the Takaful insurance business have to be listed on the Muscat Securities Market with a capital of RO 10 million and above. Mahmood said that the Law does not permit traditional underwriters to open Takaful insurance windows, making it mandatory for a company interested in doing the Takaful insurance in Oman to devote itself exclusively to the Islamic insurance business.

Maybank appoints new chairmen for Maybank IB, Etiqa

Malayan Banking Bhd (Maybank) has appointed Datuk Mohaiyani Shamsudin as chairman of Maybank Investment Bank and Datuk R Karunakaran as Chairman of Etiqa Insurance Bhd (EIB) and Etiqa Takaful Bhd (ETB). Maybank said the changes in chairmanship of its key subsidiaries followed the retirement of some directors. Mohaiyani is currently a director of Maybank. She is also the chairman of Maybank Asset Management Group Bhd and Maybank Asset Management Sdn Bhd. Karunakaran is a director of Maybank and currently sits on the boards of Maybank (Cambodia) Plc, and others. In addition, he is a director of Bursa Malaysia Bhd, IOI Corporation Bhd and Integrated Logistics Bhd.

Tokio Marine Egypt General Takaful plans 56% rise in investments this FY

Insurer Tokio Marine Egypt General Takaful plans to increase its investments in the country by 56 percent in the financial year 2015/16 to 46.8 million Egyptian pounds (5.3 million), its managing director said. Satoshi Furuya further said that the group's investments had surged to 30 million pounds by the end of the financial year 2014/15. Tokio Marine Egypt General Takaful's investments are Shariah-compliant, notably in governmental bonds, treasury bills, in addition to deposits in investment accounts with Islamic banks, Furuya added. The company is part of Japan-based Tokio Marine Group.

Faith-Based Insurance Pools for Healthcare: A Better Alternative?

As healthcare insurance in the US has skyrocketed, despite passage of President Obama’s Affordable Care Act in 2010, many Americans are turning to a new/old solution: mutualized self-help. Many Christian groups in the US are forming their own unregulated insurance pools to pay the medical bills of their members. This trend raises some fascinating questions about state/corporate bureaucracies vs. social commons. Religious faith is a big part of these expense-sharing plans. The plans themselves often reflect religious moral judgments: no medical payments for injuries caused by driving drunk, for example, or for sexually transmitted diseases contracted via an extramarital affair. Such conditions make these expense-sharing plans unacceptable to most secular consumers.

Holborn Assets Enters Shariah Market, Launches Islamic Window

Holborn Assets as part of its strategic growth plan to diversify and move into new markets has developed and launched its own bespoke shariah wealth and financial planning service. Increasing demand from its advisers and clientsprompted Holborn to undertake research on Takaful (Islamic Life Assurance) providers in the UAE market. This exercise culminated in Holborn signing terms with Salama Islamic Arab Insurance Co. Salama is the largest Takaful and Retakaful provider in the world, dominating the UAE market in terms of size.

Chief Executive of Qatar Islamic Insurance wins Takaful CEO of the year Award

Ali Ibrahim Al-Abdulghani, Chief Executive Officer, of Qatar Islamic Insurance, was awarded the Takaful CEO of the year award in a ceremony held last week during the 10th International Takaful Summit 2016 at Jumeirah Carlton Tower, London. This award was presented to him in recognition of his leadership that witnessed the Company grow steadily to the benefit of both shareholders and policyholders alike adding credibility to the Takaful model worldwide as viable alternative to the conventional insurance. Speaking at the occasion, he invited Takaful industry leaders to cooperate in establishing a ReTakaful syndicate at Lloyds of London.

S&P revises Qatar-Based Insurer Al Khaleej Takaful Group outlook to positive

Standard & Poor's Ratings Services has revised its outlook on Qatari insurer Al Khaleej Takaful Group (KTG) to positive from stable. At the same time, the ratings agency affirmed its 'BBB' long-term insurer financial strength and counterparty credit ratings on KTG. The outlook revision follows a significant improvement of KTG's operating performance in 2015, which has strengthened the company's competitive position, said S&P. Last year, KTG reported a stronger combined (loss and expense) ratio of 86 per cent compared with 97 per cent in 2014. This was mainly thanks to organizational changes during 2014 and 2015 that helped optimize the use of resources and enhanced claims management.

Fitch: Indonesia Offers Vast Potential for Takaful Products

Sharia insurance products have gained in prominence and are steadily securing a foothold in Indonesia, the world's largest Muslim country of more than 200 million. The large Muslim population offers vast, untapped potential for takaful products. However, total takaful insurance and reinsurance gross premiums have stayed low, compared with the entire Indonesian insurance market. Takaful has expanded to account for 6.2% of Indonesia's insurance market by gross written premiums (GWPs) as of end- 2015, from 2.6% as of end-2010. The sector's GWP expanded by around 4.1% to around IDR10.5trn in 2015, slower than the previous year amid a slowdown in the country's real GDP growth but outperforming the conventional insurance product segment that had more modest growth of 1.6%.


Al Hilal Takaful has signed a distribution agreement in Abu Dhabi with Euler Hermes, specialized in trade credit insurance. The agreement was forged recently at Al Bahr Towers, Al Hilal Bank’s headquarters in Abu Dhabi, during a special ceremony attended by Euler Hermes’ Regional Board. The partnership will enable Al Hilal Bank’s Abu Dhabi customers to take advantage of a broad range of trade credit insurance solutions for the management of business-to-business trade receivables offered by Euler Hermes.

Takaful International partners with Takaud on new Shari’ah investment solutions

Takaud and Bahrain-based Takaful International are partnering to provide Takaful’s individual and corporate life insurance clients with Sharia-compliant investment solutions. The new partnership will enable Takaful to provide customers of its unit-linked savings policies with the opportunity to invest the savings portion of their policy in Shari’ah-compliant growth, balanced or prudent investment strategies. In support of the agreement, Takaud will provide a complete range of services, along with tools enabling customers to identify their investment profiles. Takaud will also provide marketing assistance and training for Takaful agents and others who will be presenting these new investment strategies to customers. The Memorandum of Understanding was signed by Takaud’s CEO Mr Luc Métivier and Takaful’s CEO Mr Younis J. Al Sayed.

Armour Group Invests in Cobalt, Shariah Compliant Re/Insurance Provider

London-based Cobalt Insurance Holdings Ltd. has announced a strategic investment by Armour Group Holdings Ltd., the Bermuda-based diversified insurance group. Financial considerations were not disclosed. The strategy of Armour focuses on niche operations in the re/insurance and asset management sectors. Armour’s operations include underwriting operations, re/insurance companies, asset management companies and specialist service companies. The investment coincides with additions to the board of Cobalt of former Lloyd’s Chairman Max Taylor as chairman, and Sean Dalton of Armour as a non-executive director. John Turner, chairman of Aon Risk Solutions (UK & Americas), and former Brit Insurance Group CFO Andrew Baddeley also join the board in non-executive capacities.

GCC insurance sector regulation urged to be scalable and profitable

The conveners of the longest running Insurance platform for the Middle East – the Middle East Insurance Forum (MEIF) – announced that a report on the region’s insurance industry will be launched at MEIF 2016 that will take place on Feb. 2-3, 2016 in Bahrain. The “Finance Forward Insurance Outlook Report 2016” will be launched at the forum. The report aims to help leaders in the insurance industry make key strategic decisions and capitalize on emerging opportunities. The report states that in 2014, growth in commercial lines grew just 6.6% (compared to 19.6% for personal lines) which may account for survey respondents’ more optimistic outlook for medium-term premium growth in personal lines. Many respondents are looking into online channels, particularly for personal lines, and into expanding outreach to underinsured consumers.

Beema posts QR63m net profit in 2015

The net profit of the shareholders of Damaan Islamic Insurance’s (Beema) touched QR63m for the full-year 2015. Abdullatif Abdulla Zaid Al Mahmoud, the Deputy Chairman of the company, said Beema has achieved a gross contribution of QR314m in the year 2015; a 23 percent increase on year-on-year; and a surplus of QR16.5m from insurance operations, up 114 percent compared to the year 2014. The shareholders profit increased 17 percent to QR46.5m. The investment portfolio achieved an income of QR19.2m during the year 2015. The financial results were announced after the company’s board of directors’ meeting yesterday.

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