MAJOR TAKAFUL REPORT ON WAY

The World Takaful Report 2012, developed in collaboration with international advisory firm Ernst and Young, will be officially launched on April 16 at the seventh Annual World Takaful Conference (WTC 2012) in Dubai.
The Ernst and Young World Takaful Report, a ground-breaking initiative designed to not only identify but also to raise the bar of competitive excellence, strategic leadership and performance improvement in the global Islamic insurance industry, now in its fifth edition, will analyse key strategies that leading takaful institutions must deploy to ensure continued growth as the global Islamic insurance industry enters its next phase of market development.
"The takaful industry has witnessed significant internationalisation in the last decade, with the industry rapidly expanding its footprint beyond the traditional high-growth markets of the GCC and Malaysia," said World Takaful Conference chief executive David McLean.
"A number of new jurisdictions have modified their legal and regulatory frameworks and issued new guidelines to support the growing demand for takaful products in their domestic markets.
"Though the overall outlook for the global takaful industry remains positive, it is essential that the mounting challenges posed by increasing competition not only among Takaful operators but also from conventional players entering the takaful market space, declining underwriting profits and investment portfolios need to be immediately tackled so that the industry can maintain its current growth levels and hit the projected $25 billion mark by 2015."
The report will be launched at a special plenary session of WTC 2012. The Report 'Industry Growth and Preparing for Regulatory Change' will be presented by Ernst and Young Islamic financial services leader Ashar Nazim and banking and takaful leader Abid Shakeel.
The conference will see more than 350 industry leaders and key decision-makers in the international Islamic insurance industry engage in critical discussions that will seek to capitalise on new opportunities and chart the future direction of the global Sharia-compliant insurance market.
gulf-daily-news.com
Noor Takaful Social Media http://noorislamicbank.posterous.com

Global Takaful market may hit $25 billion mark

Dubai will  host more than 350 international Islamic insurance leaders at the 7 Annual World Takaful Conference which will be held at the Dusit Thani  hotel  from April 16to 17. The conference will set the stage for discussions that will seek to improve the competitive performance of Takaful players and map new growth horizons in an increasingly competitive global Takaful landscape

Speaking to the media ahead of the event, David McLean, chief executive of the World Takaful Conference, noted that “the global Takaful industry has witnessed tremendous growth and strong performance over the last several years with recent reports indicating that the industry could hit the $25 billion mark provided that the current growth trajectory is maintained.

However, the increasing number of players entering the Takaful market, together with over-concentration in certain business lines, has resulted in the current state of Takaful operators achieving a lower return-on-equity than conventional insurers.”

“Comparatively poor profitability and over-reliance on investment income were highlighted as key challenges for Takaful operators in the Ernst & Young World Takaful Report 2011, which was launched at the World Takaful Conference last year”, McLean added.

The event will be inaugurated by a special address by Abdulla Mohammed Al-Awar, chief executive officer of the Dubai International Financial Centre Authority (DIFC). The inaugural session will be immediately followed by a keynote plenary session featuring Saleh Malaikah, chairman, Rusd International Holding Group and vice chairman and chief executive officer, Salama Group; Hussein Al-Meeza, managing director and chief executive officer, Dubai Islamic Insurance and Reinsurance Company (AMAN); and Hans De Cuyper, executive director and chief executive officer, Mayban Ageas. The session, which focuses on improving competitive performance, will assess how leading Takaful players are successfully shifting emphasis to sound underwriting profitability and operational efficiency.

arabnews.com

Noor Takaful Social Media

Brokers appeal against new insurance premium rules in UAE

The brokerage community has approached the Emirates Insurance Authority (EIA) for a reappraisal of its recent decision on how premium payments are collected.
Last month the insurance regulator mandated that all premium payments on policies sold or renewed by brokers should be issued directly in favour of the insurers.
The directive came into effect from March 1. For the 70-odd active insurance brokers this represents a sharp U-turn from the way they have conducted their business for decades.
Sensitive
"It can be confirmed that representatives of the broker community have approached the EIA for a re-look at the directive," said an industry representative. "We are hopeful that the practical aspects of what we have proposed will be taken on board.
"This is an issue of extreme sensitivity for the wider insurance industry and not confined to the brokerage firms."
Industry sources, however, declined to comment on what these proposals were. They also did not say whether any alternate arrangements had been proposed.
In the past, the premium collected was used by brokers for their own short-term working capital needs as per arrangements with the insurers.
They would make the payments to the insurers at the end of a specified period, usually averaging 60 days.
Regulatory regime
The Emirates Insurance Authority brought in the new requirements after a brokerage firm in Dubai was found to have mishandled premium payments collected from its clients. This happened last year, and since then the regulator brought in changes that ensured such repeats would not occur.
It was also part of a broader move by the EIA to bring in an updated regulatory regime for the insurance industry as a whole to function.
Earlier, the EIA issued a circular requiring brokers to maintain separate bank accounts for premium collected from customers.
"While brokers have welcomed all the recent initiatives from the EIA, we feel there is a need for an extended discussion on the premium payment issue," the industry source said.
Supportive
According to Siddarth Razdan, chief operating officer at the brokerage firm Insighters, "The new regulation will lead to changes in operational procedures, both at the insurance companies and the insurance brokers' end.
"Personally speaking, I do not see a reason why the new regulation should lead to a shake-up in the insurance broker community."
Insurers, with few exceptions if any, are fully supportive of the change in status quo from March 1. Obviously, the fact that payments will be made directly to them from the day a policy is sold or renewed and premiums collected represents a big plus for them.
No longer will they have to wait the 60 days or so that was the norm earlier. Based on market feedback, local insurers are implementing the March 1 directive without any leeway given to their broker partners on staggering the payments.
Now that the brokers have made an approach to the EIA, the ball is now in the latter's court.
Helpful for clients
That all clients pay up the full premiums at the time of buying a policy or renewing it is a fallacy, according to broker sources.
"This is certainly not the case, especially where the premium amounts are large," said Siddarth Razdan at Insighters. "In fact, under the old system, there could be cases where the client did not pay the insurance broker in full within the credit period enjoyed by the broker from the insurance company. But the broker, in turn, paid the insurance company the full premium on the due dates." These are the grey areas that will need to be cleared with the March 1 deadline coming into effect.
gulfnews.com
Noor Takaful Social Media

Takaful growth attracts domestic and multinational providers

Takaful insurance across the Middle East and South East Asia has seen rapid growth over the past five years. Francesca Nyman reports on what the future looks like for this sector.
The takaful insurance industry has seen remarkable growth over the past five years. Global takaful contributions grew by 31% in 2009 to reach $7bn, and by the end of 2011 the market was thought to have a value of $12bn, according to Ernst & Young.
Approximately 70% of all global contributions come from the GCC, the Cooperation Council for the Arab States of the Gulf, where low insurance penetration, demographic factors and the rise in Islamic consciousness have made the region a prime target for domestic providers and large multinationals alike. The second largest contribution comes from South East Asia, which accounts for 21% of the market.
In context
Analysts are keen to put this growth in context; after all, this is still a niche market. Swiss Re's Malaysia-based head of retakaful, Marcel Papp, points out "growth is always easier when the base is low and for takaful the base is very low". But, caution accepted, the numbers are impressive and, while the global economic turmoil took its toll on the conventional market, takaful has continued to see growth.
"Every year we have been anticipating a slowdown but, with conventional insurance seeing negative or single-digit growth, takaful insurers have maintained almost 20% growth," comments Ayman Alajmi, regional head of takaful and managing director Bahrain for Chartis Takaful Enya.

"Growth is always easier when the base is low and for takaful the base is very low." Papp

Low penetration
The low insurance penetration in this region is certainly a contributing factor as insurers do not have to canablise the conventional market. In addition, many have entered the market in joint ventures with the region's Islamic banks.
As E&Y's Islamic Financial Services leader Ashar Nazim explains, this is a significant advantage. "For takaful operators, distribution through Islamic banks allows easy access to a captive market who will only deal in Sharia-compliant insurance solutions. As the size and value of Islamic banking assets has grown in number and value, so has the attractiveness of this channel," he said.
Still challenging
But, despite the positive signs, the takaful market is still challenging. One concern for the multinational carriers that operate in the region is the dim view regulators are beginning to take of companies that peddle a little Sharia-compliant insurance on the side, from the same outfit that dispenses conventional insurance products.
"Previously ‘takaful windows' were permitted allowing a single entity to offer both conventional and Islamic insurance products. However, increasingly such arrangements are prohibited, as is the case in the United Arab Emirates where it is necessary to establish and capitalise a separate entity in order to offer takaful products," explains Peter Hodgins, partner at Clyde and Co.
"All eyes are now on Qatar, which last year banned similar windows in the banking sector."
However, some regions are introducing regulatory changes that actually permit companies to open windows. The Securities and Exchange Commission of Pakistan has recently issued draft takaful rules that allow conventional insurers to open takaful window operations, prompted by a desire to improve insurance penetration in the predominately Islamic region.

"For takaful operators, distribution through Islamic banks allows easy access to a captive market." Nazim

Takaful windows
If Qatar did ban takaful windows and other countries in the region followed suit this would create a compliance issue for multinationals in the region. Mohammad Khan, UK Islamic financial leader at PwC, believes firms entering the market should seriously consider capitalising a separate company to mitigate the risks, but not all companies can, or want to, raise the capital for a separate entity.
Although Chartis' is one company considering taking a change of direction to concentrate on commercial lines reinsurance and become a fully-fledged retakaful company. "There is considerable opportunity for Retakaful insurers to support the growth of Takaful business. This is an area that we at Chartis Enya will look to address, particularly in respect of supporting commercial lines takaful business," comments Alajmi.
The sheer number of players operating, particularly in the UAE, is also a challenge. Competition ranked as the highest risk for most industry readers surveyed by E&Y for its World Takaful Report 2011. As Nazim explains: "The number of operators coming online in the last five years has led to significant downward pressure on pricing."
Overcrowding issue
While most agree the Middle East's direct takaful market is "overcrowded" not everyone believes this is a cause for concern.
"In personal lines there are a lot of players," says Khan. "We will see consolidation within Kuwait, Qatar and some UAE territories such as Dubai and Abu Dhabi, but I expect the players that emerge from this to be stronger."
When it comes to specialised risks, there are far fewer players and much less capacity. Chartis offers takaful directors and officers and takaful professional indemnity, but it is believed to be one of only three companies that offer such products.

"We will see consolidation within Kuwait, Qatar and some UAE territories such as Dubai and Abu Dabi." Khan

Public awareness
A third, and somewhat surprising problem given the sector's rapid growth, is that of public awareness. In a risk survey last year Swiss Re asked muslims whether they felt they had good knowledge of or bought takaful. Only 30% of muslim respondents in Malaysia said they had bought takaful, or had good knowledge of it. Only 5% of respondents in Indonesia said they did.
Papp believes educating the distribution channel is a key part of overcoming this gap, but accepts that it will take some time. There has been a traditional ambivalence to insurance in these countries and, although this is changing with the help of government initiatives, it will not happen overnight.
Growth challenge
If the takaful market continues to grow, some have suggested that it could target territories beyond the Islam-dominated Middle East and South East Asia.
However, if takaful operators were to expand into geographical regions with higher penetration rates some of their current advantages would dissipate. They would be attempting to cannibalise the traditional market and would have to battle for business. But some believe this is a battle they could win.
"Takaful has an added appeal for non-Muslims with its positioning as being more ethical and a fairer means of insuring against risk," Nazim says.
It would be naïve to suppose that for most consumers ethical sensibilities are a stronger driver than their purse, but where price differences are negligible those desires may be given consideration.

"Takaful has an added appeal for non-muslims with its positioning as being more ethical." Nazim

Important ethics
"If I'm looking at an ethical motor product versus a non-ethical product they will be about the same price. On those grounds the ethical product seems the obvious choice," comments Khan.
If takaful vendors can convince the public of this, demand is likely to grow. But whether the financial results will be enough to maintain the interest of global carriers that have entered the market seeking "a slice of the pie" remains to be seen.
There is a ban on excessive profits in takaful, according to Khan, but there is nothing in inherent in the takaful structure that means it would generate less profit.
"What would make a takaful company unprofitable is the same thing that would make a conventional insurer unprofitable: not charging an adequate premium for the risk."
insuranceinsight.eu
Noor Takaful Social Media

UAE travel insurance market to grow 40pc

The UAE’s travel insurance market is poised to grow by 40 per cent this year backed by a robust tourism market, said a top official of Dubai Islamic Insurance and Reinsurance Company (Aman Insurance).
One of the largest Islamic insurance providers in the UAE, Aman said the forecasted growth had given the firm the upbeat attitude to capture a significant share of the country’s travel insurance segment.
In line with this, the Dubai firm has launched three new travel insurance products - Musafir, Shengen and the Haj & Umrah travel insurance products, which have been designed to offer high benefits to both individuals and families at a reasonable cost.
These insurance solutions offers key benefits like emergency medical expenses & hospitalization abroad, transport or repatriation in case of illness or accident; emergency dental care, medical evacuation; loss of passport or official documents; advance money;  delivery of medicines; relay of urgent messages; long distance medical information system; medical referral/appointment of local medical specialist; connection services; advance of funds; personal baggage & money loss and personal accident.
Hussein Al Meeza, the CEO and managing director of Aman, said the country’s travel insurance market had demonstrated key vibrancy despite the effects left behind by the global economic crisis.
'One of the main reasons for this continued growth is the recent development of making travel insurance a compulsory aspect of securing a travel visa to any desired country, particularly Shengen and other European countries,' he explained.
The Haj & Umrah Travel Insurance is an exclusive travel insurance solution that has been specifically designed for travellers going for their annual pilgrimage to Makkah and the Shengen Travel Insurance is a solution valid and approved for travellers to any country in the Schengen European states.
Commenting on the launch, Al Meeza said, These strategic products give travellers the safety, security and confidence of full coverage, giving them the advantage of enjoying their trips without any hassles or worries

tradearabia.com

Noor takaful Social Media

Noor Takaful named Takaful Insurer of the Year in the MENA region

Second honour in a month for the UAE’s leading Islamic insurance provider marks third anniversary of its launch

Dubai, February 1, 2012: For the second time in a month Noor Takaful, the Islamic insurance arm of Noor Investment Group has been named the leading Takaful operator in the region, picking up the Takaful Insurer of the Year award at the 2012 MENA Insurance Awards.

The prestigious award was presented to Noor Takaful’s Chief Operating Officer Andrew Greenwood at a VIP lunch, held at The Address, in Dubai. In December, Noor Takaful, which celebrated the third anniversary of its launch in January, was named Best Takaful Operator in the GCC region, at the CPI Islamic Business and Finance Awards.

Dr Ahmed Al Janahi, Managing Director, Noor Takaful said: “The past 12 months have been a challenging time for the region’s insurance market. Nevertheless, Noor Takaful has continued to make significant progress, building on a strong business foundation. This latest award recognises the hard work and commitment of everyone at Noor Takaful to delivering excellence in all that they do.”
Parvaiz Siddiq, CEO, Noor Takaful, said: “To have won two top regional awards in the space of one month, is truly amazing. At Noor Takaful we understand that the customer is king. As a result, we strive to provide customers with the most effective and innovative insurance solutions available in the market. These latest awards validate our belief that in just three years we have established ourselves as the leading Takaful insurance provider in the UAE, on par with the best in the MENA region.”

Noor Takaful has committed itself to being at the forefront of the Takaful sector in the Middle East. Its contemporary approach to Islamic insurance has seen it provide a series of innovative products and services for its customers, including the GCC’s first e-Takaful

Research and Markets: Oman Insurance Report Q3 2011

The Oman Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Oman's insurance industry.