Monday, November 16, 2009

Takaful Malaysia eyes initial Middle East foray

by Alfean Hardy
Syarikat Takaful Malaysia Bhd (Takaful Malaysia), which already has a presence in Indonesia, has been invited to provide technical support to a financial institution in the Middle East and is considering the move as a stepping stone into the West Asia region, its group managing director Datuk Mohamed Hassan Kamil said.
The company, which has recently undergone a RM15 million rebranding exercise as part of its 25th Anniversary, currently has about 34 branches in Indonesia and about 56 branches locally. Speaking to reporters after the ceremony to unveil its new brand in Kuala Lumpur yesterday, Mohamed Hassan said that Takaful Malaysia had been looking at the Middle East markets.
"We have been invited by a party in the Middle East, in Qatar, for us to provide technical support in terms of wanting to set up a takaful business," he said. "The Qatar player wants to start a takaful business, so where do they go and learn about takaful? We're the first and the oldest with the depth of knowledge and expertise that we have is much deeper than most other takaful operators," he added.
To a question on whether such partnerships and technical assistance was a way for Takaful Malaysia to make in-roads into the Middle East market, Mohamed Hassan said,
"Like the example I mentioned earlier, we were invited and we will of course bring along our Takaful Malaysia brand to the partner." "Will we make in-roads within the next six months or so? Hopefully within the next one year, I'd say," he added.
Asked if the Middle East market was the one where Takaful Malaysia would be venturing into, Mohamed Hassan said that the company would consider its choices, given market conditions in the various countries there.
"If you look at the market in the Middle East, like Dubai, for instance, it's quite saturated. There're a lot of companies there already," he said. "The growing areas are in Qatar or Abu Dhabi and those are places that we might be looking into, provided we have some partners on the ground who are willing to explore and expand in the business.
Are we looking for partners? Actually, they're looking for us," he added. Asked where else Takaful Malaysia was looking to make in-roads into, Mohamed Hassan said that, in terms of market potential, the most likely venue that it would look at was China and the Far East.
"We're waiting for the Islamic infrastructure to be put in place," he said.
"As you know, Islamic bonds or sukuks are gaining momentum and not just in the Middle East or in Islamic countries. I believe countries like China and Korea have also explored and even successfully raised some money using the Islamic bond concept. "So, with these financial instruments widely available in those countries, we feel that we will be able to leverage on the portfolio because, when you do business in China, for example, you need to invest the money into Shariah-compliant assets. So, we hope that there wi l l be mor e sukuk s launched or raised in those countries," he added.

(This story appeared in The Malaysian Reserve on Nov 11, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)