Monday, November 17, 2008

Takaful Ikhlas: 4 parties keen on stake

By Habhajan Singh
Three international insurers and an international bank are interested in acquiring a stake in Takaful Ikhlas Sdn Bhd, a home-grown takaful operator owned by a local reinsurer. However, it is understood that its parent, MNRB Holdings Bhd, has yet to make a decision on the unofficial proposals, more so as Takaful Ikhlas returned a strong showing last year. For the financial year ended March 31, 2008 (FY08), the
MNRB Holdings, which began operations in July 2003, collected a premium of RM428 million, or an 11% share of the local takaful market. This is almost double the RM221 million posted in FY07.
When contacted, Takaful Ikhlas CEO Syed Moheeb Kamarulzaman confirmed that a number of foreign financial institutions have approached the takaful operator over buying a stake. If keen, the parties would have to seek Bank Negara Malaysia's (BNM) permission as required by regulations.
"A foreign partner must be in a position to help Takaful Ikhlas to expand overseas. It's not just for them to enter the local market. "It's the group's intention to expand abroad, partly to assist the nation's aspiration to build Malaysia into an international hub for Islamic finance," he said. Even without a foreign partner locally, Takaful Ikhlas has begun the process of moving abroad, via its parent.
On April 9, MNRB Holdings, which also whollyowns Malaysian Reinsurance Bhd, announced to the local stock exchange that it was taking a 9.99% stake in Britain-based British Islamic Insurance Holdings Ltd (BIIH) for up to £8.96 million (about RM48.05 million).
BIIH operates Principle Insurance, at which Syed Moheeb sits as a non-executive director. BIIH, formed in 2006, had capital in excess of £60 million at the time of its launch from Gulf- and Asia-based institutional and private investors, with almost half (45.7%) of the funds originating from Saudi Arabia, according to its website.
In a recent interview with a local newspaper, MNRB Holdings president and group CEO Anuar Mohd Hassan said the company is eyeing the Egyptian and Indonesian takaful markets via Takaful Ikhlas. On the local front, there are now eight takaful operators, several of which are joint ventures with foreign shareholding that conduct both domestic and international takaful business.
CIMB Aviva Takaful Bhd, which is the fifth entrant into Malaysia's takaful industry, is 51%-owned by CIMB Group and 49%-owned by Aviva plc.
MAA Takaful Bhd is the result of a strategic joint venture between MAA Holdings Bhd and Solidarity Company BSC (C) of Bahrain. BNM has also granted licences to three reinsurance players to undertake retakaful business in the country.
Several existing takaful operators have set up international currency business units (ICBUs) and one new international takaful company has been licensed as an international takaful operator to conduct foreign currency takaful business. (By Habhajan Singh. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays)

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