Insurance

Oman: New policy for insurance

Oman's insurance industry is about to experience a major shift in direction, with sharia-compliant products, such as takaful, set to be launched onto the market. This is part of a broader program of reforms that are opening up the financial sector to Islamic insurers and banks. It was only in May this year that Sultan Qaboos bin Said Al Said gave approval for Islamic banks to operate in Oman, along with other sharia-compliant financial services. Soon after, local insurance firms expressed an interest in entering the potentially lucrative market. Al Madina Insurance Company was given initial approval by the Capital Market Authority (CMA) in mid-August to convert itself to a takaful insurer, with the market regulator saying at least two other conventional policy writers had applied for licenses to offer takaful products. The CMA is in the process of finalizing the regulations and standards required for takaful operations, though it has made it clear that it would require an all-or-nothing approach, with conventional insurers not being allowed to operate takaful windows in conjunction with their other policy writing activities. Abdullah bin Salem Al Salmi, the CMA’s executive vice-president, told local media in September that firms would only be able to offer one form of insurance, not a mix of both. “Takaful windows are currently not allowed in the insurance sector. Insurance companies cannot operate takaful windows with conventional business,” he said in an interview with the Muscat Daily. “If they want to offer takaful, they will need to become a takaful company.” Source: Oxford Business Group

Moody's assigns Ba1 IFS rating to National Takaful Insurance Company; positive outlook

Moody's has assigned a Ba1 insurance financial strength rating (IFSR) to National Takaful Insurance Company (National Takaful), based in Kuwait. The rating outlook is positive. National Takaful is one of the largest Takaful insurers in Kuwait and was established in 2003. It writes a broad mix of Takaful non-life, life, health and medical insurance. Moody's Ba1 rating reflects National Takaful's good position in the domestic Takaful market, with a top-two market share and a top-ten market share in the overall Kuwait insurance market, albeit with a market share of around 3%. Moody's notes that the new management team has significant experience and the broad shareholder base has remained supportive of the company. However, offsetting this are a higher risk investment strategy, similar to other Takaful companies in the region, including a significant KD3.5 million nominal value Murabaha (Islamic loan) which is 75% impaired as at year-end 2010, together with significant real estate holdings, which accounted for around 50% of invested assets as at YE 2010. Furthermore, the company has recorded weak profitability in recent years, with a 2010 consolidated net loss of KD0.3 million (2009 net loss of KD0.7 million, 2008 net loss of KD2.4 million), although this was driven, inter alia, by the Murabaha impairments. Source: AMEInfo

Insurance House starts Sharjah operations

Abu Dhabi-based Insurance House has announced the launch of its operations in Sharjah as part of its regional expansion strategy. This comes after the opening of its Dubai branch earlier last month, which is already receiving a very satisfying response by its customers, said a company statement. Mohammed Alqubaisi, the chairman of Insurance House described the Sharjah launch as another milestone in conformity with its core strategy of raising its profile and reaching across the UAE. Within a very short span, Insurance House has established itself as an aggressive player in the UAE market with its customer-oriented philosophy and wide range of products including motor, health and personal insurance, he stated. "The opening of Sharjah branch reflects our commitment to serve the entire UAE population in a befitting manner," Alqubaisi said. "This branch will meet the growing demand of insurance products in Sharjah and provide customers with the most innovative and tailored insurance products to ensure ultimate satisfaction," he added. Mohammed Othman, general manager, said: “The UAE`s strong and resilient economy has boosted the local insurance market significantly, and Insurance House is also keeping a pace with this growth." “We are committed to always providing best-in-class services and developing our portfolio of products to cater to the widest spectrum of clients. We promise to open more branches in 2012”, Othman added. Source: TradeArabia News Service