Arig leads group of financial institutions to launch ‘Takaful Re’ , The first major Islamic Reinsurance Company
Arab Insurance Group (Arig) has announced the creation of the first reinsurance company in the MENA region which is to be organised and operated in a fully Shari’a compliant manner - Takaful Re Limited (Takaful Re).
Takaful Re will be the strongest capitalised company currently active in the field of Islamic reinsurance. The Dubai International Financial Centre (DIFC) with its infrastructure, immaculate international reputation and a regulatory framework based on best practices in other leading financial centres in the world has been chosen as the place of incorporation for the new company.
Arig has teamed up with several major regional financial institutions in promoting Takaful Re. These include the inter-governmental Saudi based Islamic Development Bank, UAE based Dubai Investments, Emirates Industrial Bank, Emirates Funds (of the Emirates Bank Group) as well as Qatar Islamic Insurance Company and Wethaq Takaful Insurance Company of Kuwait.
Takaful Re is being established with an authorised capital of $500 million and an issued and paid up capital of $125 million – thus ensuring the commitment of meaningful capacity to the takaful markets to attract and lead business and secure a financial strength rating commensurate with the expectations of its future clients.
Addressing a press conference at DIFC on the occasion, Arig’s Chairman, Mr. Khalid Ali Al Bustani, said “All parties in this venture consider the absence of a takaful reinsurance company in the region to be a missing-link in the rapidly growing takaful insurance industry. Double digit growth levels with an increasing tendency have been witnessed in this segment during the past years creating a promising opportunity. The launch of Takaful Re is a major step to provide valuable service to the takaful insurance companies, who will now be able to place their reinsurance business in full compliance with the recommendations and requests of their Shari’a boards.”
Mr Al Bustani also added “we would like to particularly applaud the professional approach adopted by the Dubai Financial Services Authority in considering our application timely and efficiently to date.”
During the initial years of operation Takaful Re will be supported by Arig’s expertise and competence of 25 years in the international reinsurance industry. Arig’s existing infrastructure, information systems, human resources and in depth knowledge of the business will give Takaful Re a solid head-start and first-mover advantage to spread its reach in the market immediately.
Mr. Udo Krueger, Chief Executive Officer, Arig said “Retakaful is a specialised venture and it is extremely challenging for any start-up company to secure the necessary competencies, resources and critical business size within a short time span. Takaful Re will however have the advantage of being able to use Arig’s existing infrastructure and its well established business relationships, whenever needed. This will provide Takaful Re an additional competitive edge from a shared cost base.”
Takaful Re will offer Shari’a compliant retakaful products and capacity to direct takaful operators. Takaful Re will be operational in all major lines of property and family takaful business and expects to be prepared to commence underwriting activities well in advance of business renewals for the year 2006. As a dedicated retakaful operator, Takaful Re will be committed to actively contributing to furthering the growth and development of the takaful industry by providing a full set of Shari’a compliant reinsurance products and related services.
Shari’a compliance will be supervised by an independent Shari’a Board comprising of three eminent scholars, Shaikh Nizam Yaqooby, Dr Abdul Sattar Abu Ghuda and Dr Ahmed Abdul Aziz Al Haddad.
Outlining the key Shari’a principles underlying takaful operations, Shaikh Nizam Yaqooby, said “when takaful companies place business with a Shari’a compliant retakaful company, not only do they ensure compliance with Shari’a principles but they also benefit from participating in the earnings potential of their contributions and the net surplus that remains after payment of claims, expenses and other provisions. Conventional reinsurance companies retain this surplus or distribute it to their shareholders.”
On the future plans and direction for the Company, Mr Al Bustani said “once the Company establishes a sound financial track record over the next 2 to 3 years, the promoting partners will investigate the options available to offer shares in the company to a wider group of investors.”
- Arig Leads Group Of Financial Institutions To Launch ‘Takaful Re’ , The first major Islamic Reinsurance Company
- Takaful Re constitutes Board of Directors and appoints Management Team
- Emirates Islamic partners with AMAN to launch Takaful-backed savings plan
- Global leaders of islamic insurance sector gather in dubai