Deficit quandary

GLOBAL: The Takaful industry is split over who should be responsible for injecting extra cash in the event it foresees a funds deficit. The issue has created a conflict of interest between policy holders and shareholders. The Islamic Financial Services Board initiated a consultation process last December on new rules that would see shareholders’ cash being used to avoid solvency, triggering an industry-wide debate. Abdul Rahman Tolefat, CEO of Allianz Takaful, said regulators have to reconsider this position to help the Takaful industry grow smoothly. In addition, he suggested that shareholders should issue a letter of guarantee to policy holders in case a solvency deficit turns into an actual cash deficit.

Forethought on Takaful

GLOBAL: The GCC’s real estate and mortgage industries need to consider their Takaful or other insurance-related options at the earliest stage possible as their future survival depends on it. Gopi Rao general manager at Solidarity General Takaful Company, said Takaful and insurance-related buying decisions in this region are mostly made as an afterthought, which can expose participants to unnecessary risk.

Making Takaful cool

MALAYSIA: Syarikat Takaful Malaysia wants to increase its pool of sales agents to 1,500 by the end of the year.

According to a senior official, it wishes to recruit a greater percentage of youths following the introduction of three new products.

The three products are Takaful my Gemilang, Takaful my Graduan and Takaful my Invest.

According to Wan Azman Wan Mamat, regional principal officer (retail distribution division), youngsters still lack awareness on the importance of Takaful products.

New kid on the block

GHANA: Metropolitan Life Insurance launched a life insurance and investment scheme, Labaika,
directly targeting the Muslim community.
It is the first of its kind on the Ghanaian market. Insurance holders are entitled to receive a fixed sum should death occur during the term of the insurance.

Shelved for misconduct

PAKISTAN: The Competition Commission of Pakistan has suspended the operation of Takaful Pakistan. The Takaful operator has filed an appeal against the commission’s order dated the 29th January 2010, in which the company is penalized for abuse of its dominant position, prohibited agreements and deceptive marketing practices.

Collaboration deal

UAE: Dubai Islamic Insurance and Reinsurance Company signed a cooperation agreement with the American Life Insurance Company. Under the agreement, the Takaful firm will provide American Life Insurance Company’s Takaful products to its customers in the UAE.

Plenty of growth space

MALAYSIA: Syarikat Takaful Malaysia, a subsidiary of BIMB Holdings, aims to grow its assets by 15% by 2012 amid the growing awareness among Malaysians on the importance of insurance coverage. Azian Kassim, chief investment officer, said only 40% of Malaysians have insurance coverage leaving plenty of room for growth in the country’s insurance sector for both Takaful and conventional firms.

The firm has current total assets or insurance premiums of RM4.3 billion (US$1.3 billion) or 35% of the country’s Takaful industry assets worth RM12.4 billion (US$3.8 billion).