TAKAFUL - i-Great eyes regional market for takaful JV (Indonesia included)

KUALA LUMPUR: i Great Capital Holdings Sdn Bhd (i-Great), the parent of the new joint venture (JV) takaful licensee Great Eastern Takaful Sdn Bhd, hopes to expand its Islamic insurance operations in Indonesia and Brunei by the second half of next year in line with its aspiration to become a key takaful player in South-East Asia by 2015.


The company also plans to penetrate Singapore and China over the next three to five years.

i-Great, a subsidiary of Great Eastern Holdings Ltd, would function as Great Eastern’s Islamic finance headquarters in Kuala Lumpur and would drive the takaful business expansion beyond Malaysia’s shores to the region.

Great Eastern Takaful also targets over the next five years to achieve RM1bil in premium income, driven by its sister company Great Eastern Life Assurance Malaysia Bhd’s 17,000 agents and 21 branches.

Salihuddin ... ‘Malaysia will be our takaful hub.’

 

Awarded a takaful licence on Sept 1, the company expects to receive the operating licence from Bank Negara soon, according to Great Eastern Takaful chief executive officer Mohamad Salihuddin Ahmad.
i-Great holds 70% stake in Great Eastern Takaful and the balance is held by Koperasi Angkatan Tentera Malaysia Bhd (KAT).

“Malaysia will be our takaful hub and we will use it as a launch pad to expand into these countries,” Salihuddin told StarBizWeek.

“In Indonesia, the Great Eastern group already has a syariah window and we intend to widen our footprint by converting it to a full-fledged takaful company.

“We have engaged a local Indonesian research company to conduct a feasibility study there.

“Although Indonesia has the biggest Muslim population, the penetration of takaful is less than 1% and hence the country presents a good market for us.

“For Brunei, demand for syariah-compliant products including takaful is strong although its population is only half a million,” he said during an interview.

On China, Salihuddin said Great Eastern would leverage on its presence in the Muslim belt of China where there were more than 30 million Muslims.

He said with the large agency force it would be able to penetrate the takaful market which was currently still largely untapped with a penetration rate of about 8% compared with 41% for conventional insurance.
He felt even though with 12 players now, the market for takaful was big enough for everyone.

The company is also collaborating with the International Centre For Education In Islamic Finance to boost the professionalism of its staff and agents by acquiring the right training to enhance knowledge on syariah principles.

Salihuddin said the takaful industry currently faced a talent shortage and he urged graduates to venture into this industry.

At the same time there was a need to create greater awareness on takaful as many were still not aware of the benefits of takaful which was based on the concept of profit- and risk-sharing, he added.

He also said Great Eastern Takaful would accept all proposals/applications and relevant submissions electronically, and to prevent a policy/certificate from lapsing, it would not accept cash periodically.
Instead payments would have to be via credit card, salary deductions or auto-debit.

Great Eastern Takaful is one of four recipients of a takaful licence from the central bank. The other three are JVs between AMMB Holdings Bhd and UK’s Friends Provident Group plc; Public Bank Bhd, Public Islamic Bank Bhd and ING Management Holdings (M) Sdn Bhd; and American International Assurance Bhd and Alliance Bank Malaysia Bhd.

Source : http://biz.thestar.com.my/news/story.asp?file=/2010/10/30/business/7328755&sec=business  - Oct 30, 2010