Category Archives: Takaful

Shariah compliant insurance products in Kenya

Shariah compliant insurance products in Kenya


The insurance industry in Kenya is in the process of developing Shariah compliant products and services to cater for the Muslim community.

Insurance Regulatory Authority (IRA) Chief Executive Officer Sammy Makove said the service was meant to cater for the Muslim community which has in the past been left out because products currently being offered do not conform to their religious teachings.

Makove said that due to their religious beliefs, Muslims have not been enjoying insurance services save for those that are a prescribed under the Kenyan laws like vehicle insurance.

Makove said the industry is currently in negotiations with banks and other stakeholders with a view to coming up with products that are acceptable to the Muslim fraternity.

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Takaful and conventional insurance compared

Ummah Design Blog: Takaful and conventional insurance compared


World’s largest re-takaful firm set up

World’s largest re-takaful firm set up

Dubai Banking Group (DBG) will join hands with Malaysia’s investment arm Khazanah Nasional and Asian Capital Reinsurance (ACR) to create the world’s largest re-takaful (Islamic reinsurance) company with a total capital of $300 million (Dh1.1bn).

Dubai Banking Group and Khazanah will each hold 40 per cent stake, while ACR will own the remaining 20 per cent in the new company, which is called ACR ReTakaful Holdings, said a statement by Khazanah.

Khazanah owns 32 per cent of ACR and accordingly it will be the largest effective shareholder in ACR ReTakaful. The new firms will have two operating companies to be based in Kuala Lumpur and the Middle East.

Minister for Cabinet Affairs and Chairman of Dubai Holding Mohammed Al Gergawi signed the deal in Dubai yesterday with Khazanah’s Managing Director Dato’ Azman Mokhtar.

Azman said the establishment of a re-takaful operator is the latest in a series of initiatives undertaken by Khazanah to support the development of Islamic financial services in which Malaysia has been at the forefront.

“We believe ACR ReTakaful is poised to become a major player in the global re-takaful business, not least due to the extensive pan-Asian business networks of Khazanah and DBG, as well as the expertise provided by ACR,” he said.

Dubai Banking Group was formed on Tuesday through a consolidation of Dubai Islamic Investment Group and Dubai Bank with combined assets of more than $10bn.

The group operates as a global Shariah-compliant investment company, focusing on investing in Shariah-compliant assets in the Islamic sector, which is expected to continue to grow at a very high rate. Dubai Banking Group has investments in Islamic financial institutions in the UAE, including Dubai Bank, and in Kuwaiti-based Al Fajer Re-Takaful, as well as Malaysia’s Bank Islam.

Emirates Business contacted Dubai Banking Group officials, but no comment was available.

However, recent studies showed a need for re-takaful companies to fill the gap in the insurance sector, especially in the Islamic world. Statistics showed the current takaful industry reached around $2.6bn, increasing by 20 per cent annually.

The takaful and re-takaful sectors continued to show rapid growth momentum, and is being recognised as one of the major components of the overall Islamic financial system, indicating high growth potential in years to come due to the present low rate of Islamic insurance market penetration.

There are an increasing number of takaful companies around the world trying to benefit from the booming industry. There are more than 110 takaful companies around the world, including 23 companies in the GCC. The re-takaful industry is still in its early stages, especially in the Middle East region.

Experts believe the ongoing infrastructure developments and trade activities in the Gulf will lead to high demand for re-takaful services.

Experts said the dramatic growth of the global sukuk market could potentially become a key supporting factor for strong growth of re-takaful industry. Currently, the global sukuk market, denominated in international currencies, is estimated to have exceeded $80bn.

Although the size of the market is modest by global standards, the sukuk market is experiencing remarkable growth, increasing at an average rate of growth of 40 per cent per annum. Issuance of sukuk with longer tenure will match investment and risk management needs of re-takaful industry with long-term liability. This, in particular, will greatly spur the growth potential of investment-linked products.

George Oommen, Executive Director of Insurance at Dubai International Financial Centre, expects the total takaful market will surge to $7.5bn by 2015. He said the takaful and re-takaful market has started gathering momentum and looks set to continue as more and more Islamic finance instruments become available.

Al-Baraka Bank and Takaful Pakistan sign MoU for Shariah complaint insurance services

Al-Baraka Bank and Takaful Pakistan sign MoU for Shariah complaint insurance services

Al Barka Islamic Bank and Takaful Pakistan Limited signed a Memorandum of Understanding (MoU) here on Friday to provide all kinds of Shariah complaint insurance services or to the Al- Barka Islamic Bank and its consumers..

The Chief Executive Officer of Takaful Pakistan Limited Jamil Akhter and Country Head Al Barka Islamic Bank Mr Shafqat Ahmed singed the documents on behalf of their respective organizations.

The MoU is considered as an important step for the financial sector to promote Islamic banking and industries, said Takaful Pakistan Limited CEO Jamil Akhtar addressing the audiences. He said that Takaful Pakistan Limited would play an important roll in growth of Islamic banking and economic sector. Besides operating in Muslim countries, there are more than 108 Takaful (Islamic Insurance) companies operating successfully in the non-Muslim countries such as USA, England, India, Srilanka, and Japan, Mr. Akhtar added.

Qatar Islamic Bank extending its network to Pakistan

Qatar Islamic Bank extending its network to Pakistan

Qatar Islamic Bank is set to kick-off its operations in Pakistan in 2008. A consortium of Qatar International Islamic Bank, Qatar Islamic Bank, Qatar National Bank, Amwal Group, etc., is behind the establishment of Qatar Islamic Bank in Pakistan. Choudhry Mohammed Wasi, Asst General Manager, Projects Department of Qatar Islamic Bank, disclosed this upcoming venture of his group in Pakistan, to Money Plus in an interview in Karachi. Mr Choudhry had been nominated by the QIB as the President of the bank in Pakistan. He arrived from Qatar to attend the board meeting of Pak-Qatar Takaful Insurance in Karachi and to discuss his group’s plan with State Bank of Pakistan to get licence to start operations in this country.

Q: What would be the amount of paid-up capital of the QIB in Pakistan?

A: Initially, we would start the operations of Qatar Islamic Bank with paid up capital of 100 million dollars and increase it at a later stage.

Q: When the bank is being launched?

A: In principle the State Bank of Pakistan has given its consent for the establishment of the QIB. In 2008 we are planning to start operations of the bank in Pakistan. At present we are fulfilling the legal requirements of the State Bank of Pakistan which are mandatory for the issuance of a licence. The consortium has proposed my name as President, Qatar Islamic Bank, Pakistan.

Q: What fascinated your group to set up QIB in Pakistan?

A: It is part of global expansion plan of our group. We are increasing the presence of our group. We are also extending the network of our group to Malaysia, Lebanon, Bahrain and the United Kingdom. Our consortium wants to extend its business operations to 16 countries in the world, including the Middle East, Europe and Pakistan.

In fact, the financial sector here is growing rapidly. The analysts believe that the share of Islamic banks in the overall banking sector would grow to 10-14 per cent by the year 2012-2013, from existing share of 3 per cent, because of immense potential of growth in this sector in the years to come.

Q: How do you see the scope of Islamic banking here?

A: With a population of over 160 million, Pakistan offers plenty of opportunities for investment and growth in the financial sector. The economy of the country was also showing impressive improvement during the past few years that was luring the foreign investors to develop their stake in Pakistan. At present five full-fledged Islamic banks are operating in Pakistan while the existing commercial banks have also established special windows/operations to capture the Islamic banking business that shows that this segment of banking offers more potential of growth in future.

Q: What is the background of the consortium?

A: The consortium of Qatar International Islamic Bank, Qatar Islamic Bank, Qatar National Bank, Amwal Group, Qatar Insurance Company are listed at Doha Securities Market. The assets of the consortium stand around 55 billion dollars and its equity amounts to 20 billion dollars. Qatar International Bank is one of the fifth largest Islamic financial entity in the world. The QIB is the first Islamic Bank in Qatar. It has 10 per cent share in the Qatari banking market and 57 per cent share in the Qatari Islamic banking market. It also has international investment operations in Asia, Middle East, Europe and North Africa. Qatar Islamic Bank will be the sixth full-fledged in Pakistan.

Q: What would be the strategy of QIB to capture business?

A: During the first two to three years of operations of the QIB we will target corporate sector financing and also invest in Sukuk. Later on we will enhance the scope of operations of the bank to meet maximum local requirements.

Q: What would be the next venture of the consortium in Pakistan?

A: After launching the Qatar Islamic Bank we will also set up Real Estate and other Funds to promote investment in Pakistan. Like financial sector, the real estate and some other sectors have immense potential of growth in future.

Q: Any existing venture of the consortium in Pakistan?

A: The said consortium had already established Pak-Qatar Takaful Insurance in Pakistan to offer Shariah-oriented family and general insurance services. The paid up capital of Pak-Qatar Family Insurance amounts to Rs 500 million while Pak-Qatar General Takaful had been set up with Rs 300 million capital. It is the first private sector investment from Qatar in financial sector in this country. The general insurance has started its operations recently, while family takaful would begin its soft opening by end-February 2008.