LEARN INSURANCE

* Eyes Muslim-owned SMEs with less than 1 mln stg turnover

* Mulls life insurance partnership, Europe expansion

LONDON, July 24 (Reuters) - Salaam Halal, the UK's only stand-alone Islamic insurer, will expand next year to offer insurance -- or takaful -- to companies run by Muslim businesses, the company's CEO said on Friday.

Bradley Brandon-Cross told Reuters the company, which launched in 2008, wants to launch the first takaful product range for Muslim-owned small and medium-sized business in Britain, which he estimated number around 140,000.

Major European insurers have been considering a move into the European takaful market, seeking to tap demand from the millions of Muslims on the continent [ID:nLE729394], but the market is still in its infancy and growth is hard to predict.

Salaam Halal -- which has so far focused on car and home insurance -- will particularly target businessmen with less than 1 million pounds ($1.65 million) annual turnover, typically lawyers, accountants, doctors and retailers.

"It was always our intention to look at these markets. We will be very much focusing on this project in 2010," Brandon-Cross said.

Takaful works like mutual-insurance but there is a clear segregation of the assets owned by members and those owned by the insurer. Members contribute to a common pool to fund claims and members benefit if the pool is left in surplus.

Investments made using the pool of funds adhere to sharia law and shun sectors such as alcohol and gambling.

Ernst & Young has estimated the global takaful contributions will reach $7.7 billion in 2012, double the volume in 2007, at the conservative end of estimates.

Salaam Halal is considering offering life savings products in partnership with other insurers in the UK and outside the UK, which Brandon-Cross declined to name. The company may also move into European countries with large Muslim populations, such as France, Germany and the Netherlands.

--Thomson Reuters

Allianz will launch its first Islamic annuity product next year, the head of its Takaful unit said, tapping into a growing number of clients in the Middle East keen to add to their state pensions.

It has long been hard for takaful -- or sharia-compliant -- insurers to sell such products, because of the lack of long-term Islamic bonds with which to match pension liabilities, Abdul Rahman Tolefat told Reuters on Wednesday.

The German insurer's unit had lobbied banks to issue long term debt and unnamed banks had now issued 25-year to 30-year sukuk, Tolefat said at a conference.

"This is really a promising industry, especially in the GCC (Gulf Cooperation Council) -- people are looking for private pensions because state pension are not high enough," he told Reuters on the sidelines of the conference.

Allianz was one of the first Western insurance companies to venture into takaful, in which members contribute to a pool of funds which is used to indemnify participants who suffer a loss, much in the same way as with a mutual insurer.

Allianz Takaful already has a pension product which pays out over a pre-agreed number of years, but annuities that guarantee income until death are still an untapped market.

Allianz Takaful is also lobbying for more access to short- to medium term debt and is asking the Bahraini Central Bank to earmark part of any sukuk issuance to takaful companies, who don't have the clout to compete with large banks.

Earlier this year, the Bahraini Government issued a $750 million sukuk and said last month it will issue a further $530 million of sukuk in local currency.

Takaful companies could still buy these sovereign sukuk on the secondary market but they tend to be too expensive, he told the conference delegates.

Among its projects, Allianz is also pursuing a partnership by the end of the third quarter with a network of distributors. Tolefat declined to say who they are.

--Reuters

Services can be accessed through internet, making it cost-effective for local, regional and multi-national transactions

Noor Takaful, the Islamic insurance arm of Noor Investment Group, today announced it has teamed up with Mondial Assistance Group, the world’s largest provider of emergency services, to launch Travel Takaful comprising a wide spectrum of support services for contingencies arising during foreign travel.
Coinciding with the approaching holiday season, ‘Travel Plus’ and ‘Travel Gold’ are value-added, tailor-made takaful packages designed to assist customers who may need assistance during flight cancellation and delays, loss of luggage, emergency situations, incurring of specific liability, and covering of accident and medical expenses.

Parvaiz Siddiq, CEO, Noor Takaful, said: “Noor Takaful prioritises the delivery of products and services that have the convenience of our customers at its core. Our travel solutions offered in conjunction with Mondial Assistance is guaranteed to provide an effective and professional response to travel emergencies at any given time of the year. We are confident that both offerings will be widely welcomed by our customers for its broad-ranging benefits, particularly with the upcoming travel season.”

--Eye of Dubai

Securitisation of takaful premiums is possible but subject to thorough study
With the corporate bond market in a moribund state, another avenue for bond issuance is via the securitisation of takaful premiums.

According to Syarikat Takaful Malaysia Bhd (STMB) chief investment officer Azian Kassim, the idea is possible but it should be subjected to a thorough study “as the underlying principles of takaful business is totally different (from) that of conventional.”

Maybank Investment Bank Bhd fixed income research head Tan Chee Wee noted that car financing had already been securitised.

“It is the same as the securitisation of car financing – those borrowers are making the monthly payments that are in turn channelled into payment of interest rates on the bonds issued against these auto loans,’’ he said.

In this case, it would be the takaful policyholders who would be providing the cashflow.

“I would say it works, but the important thing is from an investor’s point of view to not just look at the structure but also understand the background of those who bought takaful insurance,” Tan said. “At the end of the day, it boils down to the individual credit of all the people who have taken (takaful) insurance and who are paying the premium on a yearly basis.”

At present, an example of an auto finance-backed corporate bond is the secured fixed rate bond issued by Cepat Assets Bhd.

Securitisation, the process of pooling and repackaging cashflow-producing financial assets into bonds, will provide an opportunity for takaful operators to unlock the value of the underwriting business by transferring certain portions of risks to capital markets.

Azian said the move would require “concerted efforts from various parties for this to happen and among other things, the regulator and syariah board need to be involved.”

“As no such product has been made available in the Malaysian market, the regulatory requirements are yet to be determined. However, given the recent fallout of the collateralised debt obligation (CDO) market in the United States, it is assumed that the regulatory bodies would be very stringent in approving such products,” she added.

For the syariah board, concerns involve the structure for the transaction and also the usage of takaful contributions as the underlying asset.

“At this juncture, there is no plan to securitise takaful contributions. However, we would keep our options open to this new innovative capital market instrument. Should there be any opportunity to embark on such a transaction, the viability of such exercise would be assessed accordingly before any decision is made,” she said.

For the year ended Dec 31, 2008, the total net contribution income for all the takaful operators was RM3.025bil, while total takaful fund assets stood at RM10.569bil.

As to how much this would translate into the potential value of bonds, Azian said: “We do not have any estimates as this is still subject to a detailed study by all respective parties especially capital market players.”

Due to the global financial crisis, there have been calls to move away from complex securitisation schemes since the US subprime collapse is partly blamed on asset-backed securitisation linked to mortgages.

“In our view, the subprime crisis was not a result of complex securitisation schemes but due to a combination of a lack of regulatory supervision and proper assessment by the investors,” she added.

Azian reckoned that the securitisation of takaful contributions would spread the risk more broadly rather than just “warehousing” it in a particular takaful company which has lower capacity and diversification potential than the capital market as a whole.

“The removing of risks from the takaful industry would reduce transaction, agency and regulatory costs, thus increasing the efficiency of capital. Investors would also benefit from the availability of new classes of securities.

“Furthermore, securities based on risks associated with the takaful industry such as catastrophic, mortality and longevity risks are likely to have a relatively low co-variance with market systematic risk, making them even more valuable for diversification purposes,” she said.

However, Azian cautioned that such securitisation must be accompanied with stringent surveillance from the regulatory bodies and proper product education.

--The Star Online

The Tadawul All Share Index (Tasi) declined by three per cent last Saturday, dipping below 6,000 points.

The bourse was weighed down by an eight per cent decrease in the Saudi Basic Industries Corp (Sabic) share price on profit taking after the stock hit 67 riyals, recording a 61 per cent since April 21.

Following these losses, the market bounced back again above 6,000 points, fuelled by the increase in oil prices and the positive performance of the global equity markets.

Meanwhile, bank stocks also declined due to profit taking, especially those of Samba and BJAZ, by between six and seven per cent. In addition, speculation continued on the insurance sector's shares.

The trading values of sectors were as follows: Petrochemical Industries 22 per cent; Insurance 17 per cent; Banks and Financial Services 11 per cent; Industrial Investment eight per cent; Agriculture and Food Industries eight per cent; Building and Construction eight per cent, Telecommunications and Information Technology seven per cent; Real Estate Development six per cent; Multi-Investment four per cent, Retail four per cent; Transport two per cent, Hotels and Tourism two per cent; Media and Publishing one per cent; while Cement, Energy and Utilities remained unchanged.

The top five gainers were: Al Ahli Takaful Co 27.5 per cent; Tihama Advertising and Public Relations Co 25.4 per cent; SABB Takaful Co 25.1 per cent; Saudi Transport and Investment Co 21.6 per cent; and Saudi Industrial Export Co 19.3 per cent.

The top five losers were: Allied Cooperative Insurance Group -22.5 per cent; Samba Financial Group -6.7 per cent; Bank Al Jazira -6.2 per cent; Arabia Insurance Cooperative Co -5.4 per cent; Makkah Construction and Development Co -5.1 per cent. The Tasi registered 6052.63 points on Wednesday, closing up by 0.1 per cent from last week. As of yesterday, the Tasi is 26.0 per cent higher than at the start of the year. Trading value reached 43.3 billion riyals, down against last week's 48.8 billion riyals. Sabic dominated trading value at 13 per cent, followed by Alinma at eight per cent and Zain KSA at four per cent.

--Gulfnews

Aman Insurance, the region’s leading insurance company, has been awarded the ‘BEST TAKAFUL OPERATOR OF THE YEAR 2009’ for the second year running by Policy Magazine at the Middle East Insurance Awards Ceremony at Raffles, Dubai.

Commenting on the award, Mr. Hussein Al Meeza, Managing Director and CEO of AMAN, said:
‘’This year’s award highlights our on going commitment to serve the local and regional insurance market and was in recognition of our continual compliance with Sharia’a law and our commitment to develop the Takaful Market. Winning the ‘BEST TAKAFUL OPERATOR OF THE YEAR 2009’ for the second year in a row was a real honour for Aman. We are extremely proud of our achievements this year and look forward to continuing to exceed the needs and expectations of our shareholders throughout the region.”

Aman Insurance was awarded Best Takaful Operator of the year based on its development strategy, product innovation, response to customer needs and quality of service. The award was received by Mr. Iqbal Mankani, Chief Operating Officer of Aman.

As a relatively young company, Aman has established itself as one of the leading local and regional Takaful Company with strategic alliances throughout the Arab World. Aman thanks its customers and partners for the confidence reposed on Aman and assures them it would continue to excel in its service to the community.

--Middle East Events

In conjunction with the Joint Programme with Permodalan Nasional Bhd (PNB) in Sarawak, Islamic based insurance and financial services provider, Takaful Ikhlas Sdn Bhd (Takaful IKHLAS) will be organising several activities from May 19-21 at the Padang Merdeka in Kuching.

In a statement Friday, Takaful IKHLAS said the company's programme in Kuching is a follow up to its participation in the investment week programme "Minggu Saham Amanah Malaysia (MSAM) 2009" which was held in Johor Baharu last month.

"Takaful IKHLAS participation in the programme will enable the company to provide more exposure to the people in Sarawak on the meaning of takaful and the role and benefits of protection savings as well as its other products," Takaful IKHLAS President and Chief Executive Officer Syed Moheeb bin Syed Kamarulzaman said.

Besides the information, the exhibition space taken up the company will also offer other activities such as Quiz, drawing contest, a zakat payment counter and workshops.

"Visitors to the Joint Programme with PNB will also have the opportunity to win various prizes through the activities," Syed Moheeb said.

Among the prizes lined up include umrah packages as well as consolation prizes comprising deposit accounts of RM200 in Tabung Haji accounts for Muslims and in Islamic savings accounts for non Muslims as well.

Other activities to be held during the event include free health check-up and a blood donation campaign.

Takaful IKHLAS, which began operations in July 2003, is the subsidiary company of MNRB Holdings Bhd, an investment holding company listed on the Main Board of Bursa Malaysia. Its major shareholder is Permodalan Nasional Bhd.

Takaful IKHLAS has two customer service centres in Kuala Lumpur and Selangor as well as regional offices in the city, Kota Baharu, Johor Baharu, Sungai Petani, Kuching, Melaka, Kota Kinabalu, Kuantan, Ipoh and Putrajaya.

-- BERNAMA

MAA Takaful Bhd aims to edge ahead of others in the Islamic insurance market through initiatives such as being the first local takaful player to have a syariah expert on its board.

Chief executive officer Salim Majid Zain says having an expert syariah adviser on board will help the company make informed strategic decisions and help it face growing competition in the industry.

“We are serious in ensuring that all aspects of our operations are syariah-compliant and certainly will have an edge over other players with the presence of our syariah adviser to provide us with relevant expert advice on syariah principles.

“Having an expert on the board will also enhance our expertise in Islamic finance, corporate governance as well as give more confidence to our target market customers,’’ Salim says in an interview.

As one of the latest entrants into the takaful market, the company has aggressive plans to grow its market share, he says, adding that the company is recruiting talented agents.

At present the company has about 15,000 agents, of which 30% are active.

The company has also introduced customer-centric financial planning and sales-automation software in an effort to enhance service.

Investment-linked funds is also one of the areas of focus for the group.

To this end, Salim says MAA Takaful will also be hiring a top fund manager to assist in the development and management of these funds.

Investment-linked funds will continue to be the main contributor to family takaful business, he adds.

The company’s market share in investment-linked takaful business last year for regular new business was 13% and about 10% for single contribution (premium).

It is targeting a 35% growth in regular investment-linked new business by the end of the year.

There are eight players in the takaful market currently and the granting of up to two new family takaful licences this year under the Government’s liberalisation of the financial sector is expected to further heat up competition.

Asked on how it would compete with other new players coming on board, Salim says: “The new players will certainly increase competition and this would also pave the way for greater acceptance of takaful as an alternative to insurance and traditional invesment products.

“MAA Takaful inherits the MAA brandname which has been long established in Malaysia. It is known and well represented in the multi-ethnic population which provide the cutting edge in growing our business and retaining our customers.”

MAA Takaful is a 75:25 joint venture between MAA Holdings Bhd and Bahrain’s Solidarity Company BSC.

--TheStarOnline

Sri Lanka's Amana Takaful Insurance said it made a premium income of over a billion rupees in 2008, helping to reduce losses, and that it expects medical insurance to grow this year.
Gross Written Premium grew by 26.56 percent to 1,024 million rupees with life insurance growing by 44 percent to reach 188 million rupees and General Insurance up 23 percent to achieve a premium income of 835 million rupees.

A company statement said total assets grew by 14.87 percent to reach 1,053 million rupees in 2008 as against 917 million rupees in 2007.

Prudent underwriting and improved investment income helped Amana Takaful Insurance to reduce its operating loss by 65.7 percent, the company said, without giving further details.

Amana Takaful Insurance chairman Tyeab Akbarally said they expect "significant growth" in the family Takaful business in 2009 and also from the medical insurance business.

"There is a lot of scope for medical insurance in Sri Lanka, given the high cost of quality residential medication."

Though the firm's investment income grew significantly, one of their main challenges remains to be the dearth of Islamic investment opportunities in the country, he also said.

"While conventional insurance companies in Sri Lanka largely benefit from the high returns on investment, as a Takaful operator, our investment opportunities are limited," Akbarally said.

"Islamic investment opportunities are still in their infancy in Sri Lanka."

The company said it is ranked among the top eight players in the General Insurance sector and ranked in ninth place in the Life Insurance sector in Sri Lanka.

The firm started in 1999 in collaboration with Takaful Malaysia, one of the largest Takaful operators in the world.

--lanka business online

By EUGENE MAHALINGAM

So immersed is Syarikat Takaful Malaysia Bhd (STMB) in helping to improve the lives of the underprivileged that it has a brand dedicated to this corporate responsibility (CR) programme, called TakafulmyJalinan.

Group managing director Datuk Hassan Kamil says having a brand allows the company to be more focused in achieving its CR-related goals.

“Most companies carry out their CR activities on an ad hoc basis or as separate activities unrelated to one another but we feel that by having a brand, each activity is better implemented and proves more sustainable,” he tells StarBizWeek.

“It also helps us better communicate CR to the public,” Hassan adds.

Formally launched in January, TakafulmyJalinan acts as an umbrella brand to represent categories of CR activities undertaken by STMB. Two sub-brands – myJalinan~Ilmu and myJalinan~Kasih – address issues related to children’s education and poverty respectively.

Under myJalinan~Ilmu, STMB intends to “adopt” primary schools in rural areas of the country to improve their quality of education.

STMB is no stranger to helping needy schools. Under the Government-initiated Pintar Programme, it adopted Sekolah Kebangsaan Permatang Binjai in March 2007.

The school is located in a rural area in Penang where most of the students come from low-income families.

“We want to improve the quality of education at the school. Apart from financial assistance, we have donated books and computers,” Hassan says, adding that STMB aims to lend a helping hand to more rural schools.

On how STMB selects the schools, Hassan says: “We have people all over Malaysia. They will submit the names to us and we will make the final assessment on whether they are truly deserving.”

The myJalinan~Kasih sub-brand sees STMB providing assistance to groups of individuals such as orphans. Hassan says STMB intends to help at least one orphanage a month.

“We have given monetary assistance to five orphanages since the launch of our CR brand. We personally visit the orphanages to ensure that they deserve assistance,” he says, adding that STMB has also donated furniture and clothing to the orphanages.

In addition, single mothers and the destitute are also targeted under myJalinan~Kasih, according to Hassan.

“Before we choose the mothers, we look into the person’s background such as her monthly income. We go through bodies like Social Welfare Department to get their names. We then filter and screen them to know which ones are deserving.

“We also help other individuals who are in dire straits. These may include the children of the single mothers.”

Going forward, Hassan says STMB is in the midst of launching a new sub-brand called myJalinan~Alam that will focus on activities related to the environment. “This will include educating children on the importance of preserving the environment,” he says.

Hassan says that RM500,000 has been disbursed to deserving recipients since the launch of TakafulmyJalinan.

“We have set aside another RM500,000 for the next few months. Despite the current economic situation, we have no intention of cutting back on our CR efforts.

“We also strongly believe that care and assistance should not be placed solely in the hands of the Government. Every individual and organisation should play a role in helping those in need,” he says.

Hassan adds that as a company carrying out a business governed by syariah principles and Islamic fundamentals, it is an obligation for STMB to assist the underprivileged.

“This is part of our social obligation as a takaful company. In Islam, as an individual you must pay zakat if you have an asset or income. The same applies to corporate entities.”

--Thestaronline

Takaful seems to have become a fundamental part of the insurance landscape and is growing from strength to strength, within the region and internationally with more players sprouting up even in the West and North America.

With the global financial crisis raging, Islamic finance seems to have been relatively unscathed. Takaful still remains a viable option, if not a more attractive option now for both Islamic as well as conventional clients. Asia Insurance Review, therefore together with our Lead Sponsor B.E.S.T Re is putting together the next Asian Takaful Conference this year to address the challengesand opportunities facing takaful in the current global financial crisis. The conference, supported by International Cooperative and Mutual Insurance Federation (ICMIF) & the International Insurance and Takaful Companies Federation (FIITC) will look at the theme, "The New Takaful Landscape in the Current Global Financial Crisis".

However, takaful players together with regulators and rating agencies must remain vigilant to ensure that proper risk management practices are in place to determine solvency and capital requirements.

The 4th Takaful Conference will look at issues that affect the Takaful industry in this current financial crisis �' the growth potential, corporate governance, maintaining solvency, the role of regulators in ensuring a balanced regulatory framework, and the operational and strategic challenges faced by takaful operators. There will be special panel discussions on issues like surplus distribution, as well as a comparison between how takaful is run in Asia and the Middle East. The conference will touch on the need to boost standards in the takaful world and offer real value to consumers while making sure the industry remains effi cient, competitive and compliant. There will be a sharing of success stories in the arena as well as the factors limiting the growth of takaful and retakaful.

Sign up today for this important event to learn from the leaders and to find out how to sharpen the edge of your takaful business and how to make it a serious platform for success. The conference is expected to attract takaful as well as conventional companies from around Asia including insurance and reinsurance companies, Islamic banking institutions, regulators, Shariah scholars, consultants, brokers as well as service providers keen to tap the potential of the takaful market. We hope to see you in Singapore.

Who Should Attend

* Life & General Insurance & Reinsurance Companies (both Takaful and Conventional)
* Takaful Companies and those providing Takaful insurance services
* Islamic Banking Institutions & Islamic Finance Players
* Regulators
* Shariah Scholars
* Management Consultants
* Reinsurance & Insurance Brokers
* Service Providers to the Takaful industry, ie lawyers, technology companies, loss adjusters, etc.

--pr-inside

By Diana West :
At your service, American Taxpayer! AIG's Shariah Advisory Board. Meet Moe, Larry and Curly. I mean, Mohamed, Muhammad, and Mohammed.* As members of the AIG Takaful Shariah Advisory Board, they really work for you and me, the American taxpayer, ever since we the people bought an 80 percent stake in the bankrupt insurance company.

How's that for bait and switch? While we agonize over chump-change AIG bonuses, we ignore the fact we're paying for the subversion of liberty and justice for all by funding AIG's promotion and entrenchment of sharia--Jew-, Christian-, and humanist-hostile supremacist Islamic law. As of December 2008, by the way, AIG Takaful insurance products went on sale in the USA under the ironically named Lexington Takaful Solutions.

Lexington, Lexington--wasn't that where our experiment in liberty began with the shot heard round the world? Must have been a dream. At this rate, Lexington will go down in history as the beachhead of US taxpayer-funded sharia. From "taxation without representation" to taxation to support sharia: How the free have enslaved themselves.

But back to the Sharia team on Unlce Sam's payroll.

Mohamed #1 is Mohamed Ali Elgari, born Makkah, Saudi Arabia. The AIG Takaful website boasts that he's the winner of "the Islamic Development Bank prize in Islamic Banking and Finance for the year 1424H."

1424H? That's 2004 for infidels. (Do the Islamic math here.)

Someday, we'll consider Elgari's career trajectory typical. That is, where once our elites went from say, Groton to Yale College to Harvard Law School, now, pace Elgari, they go from from King Abdulaziz University in Saudi Arabia to the OIC to Harvard Law School. There, not far from the statue of John Harvard, the crews rowing on the Charles, and, of course, Harvard Yard, the Saudi sits on "the advisory board of Harvard Series in Islamic Law."

In other words, the cancerous advance of sharia into our institutional organs has already reached a critical stage.

Read about the rest of AIG's Sharia Team here.

Note that Muhammad #2's bio, first crack out of the box, informs us that he is the son of "justice (Retd) Mufti Muhammad Taqi Usmani." Papa Usmani is indeed a world-noted and prolific sharia scholar, whose works include the book Islam and Modernism where he wrote: “Killing is to continue until the unbelievers pay jizyah (subjugation tax) after they are humbled or overpowered.”

Don't ask me why AIG thinks that's a irresistible sales pitch for life insurance.

Paul Sperry reports on Usmani the Elder and his jihadist activities--and his abrupt disappearance in 2008 from the Dow Jones sharia team after said jihadist activities began to be reported--here. Funny how proud of him AIG still is.

--EuropeNews

Nexus, the region's leading financial adviser, and Solidarity Family Takaful, launched a joint marketing agreement for Takaful product in Bahrain, designed to provide clients with a Sharia-compliant opportunity to protect wealth for the future.

Demand for Takaful products - products which are compliant with key Islamic tenets and based on the concept of shared responsibility - in the Middle East has increased sharply in recent months, with clients appreciating the benefits of the transparency and security of such products, as well as their adherence to Islamic ethical expectations.

In 2008, the global Takaful market was estimated at $2.3 billion, with the Middle East region accounting for 46 per cent of total sales, according to the Bahrain Insurance Association. International growth of the Takaful market currently stands between15 and 20 per cent per annum.

Nigel Watson, general manager of Nexus Bahrain, said: "The Takaful market is becoming increasingly sophisticated in response to customer demand, providing an equivalent level of return to conventional financial products, as well as a high level of transparency and flexibility."

Gopi Rao, general manager of Solidarity Family, said "We are seeing an increased demand for customised Takaful products in Bahrain. As part of our commitment to offering flexible products, we are working with regional insurance experts such as Nexus to further develop advanced products suitable to client requirements in Bahrain."

--Gulfweekly

Bandar Seri Begawan - The world's first fully Syariah compliant retakaful wording agreement was signed yesterday, marking another milestone in the Islamic insurance industry in Brunei Darussalam, state broadcaster Radio Televisyen Brunei (RTB) reported yesterday.

The agreement was made between Takaful IBB Berhad and Labuan Re (L) Ltd. As the chairman of Takaful IBB Berhad, Ministry of Communications Pehin Oratg Kaya Seri Kerna Dato Seri SdiiZ Hj Abu Bakar Hj Apong was present to witness the signing. Signing on behalf of Takaful IBB Berhad was its acting managing director, Hjh Lily Hj Kula while CEO Dato Hj Majid Mohamad represented Labuan Re (L) Ltd.

A representative from Takaful IBB Berhad says the financial institute is among the world's first takaful operators to adopt the takaful wording in its retakaful treaty programmes for 2008 to 2009. The retakaful wording is based on the concept of waqadah and tabarruk, where Takaful IBB Berhad

as a takaful participant, has agreed to allow Labuan Re (L) Ltd to handle its takaful funds in the most applicable way.

The contents of the retakaful wording clearly define the treatment of the retakaful fund, providing the guidelines and claims payment, the mechanisms of the fee generated and the formulation of the distribution of the net retakaful surplus to the retakaful participants, in corn- pliance with Syariah requirements.

"This is a move towards the right direction to make sure all products as well as services in retakaful are fully syariahcompliant," Dato Hj Majid was quoted as saying. "This is one of the ways where Labuan Re is contributing to the spread and progress of takaful, not only in Brunei, not only in Southeast Asia, but also in the world." According to the report, takaful contributions currently stand at US$7 billion as opposed to US$2 billion in 2006.

-- Courtesy of The Brunei Times

Bank Negara Malaysia (BNM) has appointed Bakarudin Ishak and Dr Sukhdave Singh as assistant governors effective March 5, 2009.

In a statement here today, BNM said Bakarudin has served the bank since 1985 and has held several senior positions.

Bakarudin has served as director of Foreign Exchange Administration Department, director of the Islamic Banking and Takaful Department and was appointed chief executive officer of Malaysian Electronic Clearing Corp Sdn Bhd on Dec 1, 2008.

BNM said as director of Islamic Banking and Takaful Department, Bakarudin had an important role in the bank's efforts in the development of Islamic finance and in promoting Malaysia as an Islamic financial hub.

It said Sukhdave joined the bank in 1986 and has a doctorate in in monetary and international economics from Vanderbilt University, US.

During his service with the bank, Sukhdave has served in the Economics Department, headed monetary policy research, and in 2005, became director of the Monetary Assessment and Strategy Department.

Sukhdave has also represented the bank at regional and international macroeconomic and monetary policy fora and has chaired Asean taskforces on regional exchange rate and currency cooperation.

-- BERNAMA

AMRESEARCH views RHB Bank’s bancassurance tie-up with American International Assurance Bhd (AIA) positively although there are no details on it as yet.

It said the tie-up would enable RHB Bank to add a new source of non-interest income and leverage on AIA’s expertise and experience. It would also mean that RHB Bank would not have to tie up additional capital for the generally capital intensive life insurance business. “This strategic alliance with AIA is the second that RHB Bank has unveiled in recent times, the first one being the set-up of the first banking kiosk in Tesco Hypermarket and the launch of Tesco co-brand debit and credit cards. This forms part of management’s strategy to enhance the bank’s distribution capabilities through partnership,” AmResearch noted.

On Monday, RHB Capital Bhd — the holding company of RHB Bank — announced that the bank had executed a term sheet with AIA, which constitutes the preliminary statement of intentions of AIA and RHB Bank to establish a 10-year mutually exclusive bancassurance relationship in Malaysia.

Under the proposed terms of the bancassurance alliance, RHB Bank is to market, promote and sell conventional life insurance products developed by AIA via the bank’s network of offices, branches and other channels. AIA would absorb all the cost and expenses necessary for the successful implementation of the plan.

In addition, AIA shall commit upfront RM50 million in consideration for RHB Bank’s commitment to the 10-year exclusive bancassurance relationship.

“Both parties have also agreed to review the offering of takaful products. In the event AIA notifies RHB Bank that it is unable to add takaful products to the bancassurance product range, AIA will pay a sum of RM50 million to RHB Bank to enable RHB Bank to source for takaful products from another insurer,” said AmResearch.

“This RHB Bank-AIA alliance is similar to the Public Bank-ING 10-year partnership that was cemented in November 2007. But the goodwill payment that Public Bank received from ING was a more substantial RM200 million with another €12.4 million (RM58.1 million) to be paid over the duration of the agreement upon fulfilment of the conditions set out in their agreement.

“The bigger goodwill payment under the Public Bank-ING tie-up can be attributed to the regional coverage that Public Bank would provide to ING,” added the local research house.

At RM3.76, AmResearch noted that RHB Capital is trading at one time its FY09F’s price-to-book value (P/BV) and 7.7 times FY09F’s earnings per share (EPS).

“We have a fair value of RM4.10/share, which values the stock at 1.1 times P/BV and 10.6 times PE (price earnings),” it said, adding that it is maintaining its hold recommendation on the stock.

RHB Capital slipped eight sen to close at RM3.68 yesterday.

The Edge