SALAMA launches Health Takaful in UAE
SALAMA launches Health Takaful in UAE
Signals Start of AED 165m Market Expansion
SALAMA Islamic Arab Insurance Company, the worlds largest Takaful and Re-Takaful provider, has launched Health Takaful in the United Arab Emirates, the start of an AED 165 million expansion of its insurance products base in the emirates that will help drive future profitability.
The launch follows the signing of a landmark agreement with the MedNet Group, a wholly-owned subsidiary of Munich Re, one of the worlds largest reinsurance companies. MedNet will process all SALAMAs Health Takaful claims.
“This is the beginning of an aggressive expansion into the personal insurance market by SALAMA. In addition to Health Takaful, we will be launching our innovative Life Takaful product shortly, “said Dr Saleh Malaikah, Vice Chairman and CEO, SALAMA Islamic Arab Insurance Company.
“Health Takaful, along with Life Takaful, will make a significant contribution to our growth over the next five years. Both products will eventually be offered in all markets in which SALAMA operates.”
SALAMA is the first insurance company to provide Health Takaful through the MedNet Group network that has over 750,000 members and provides access to more than 4,000 hospitals in Europe, the United States and the Middle East.
“Takaful products are in huge demand because they rely so heavily on the virtue of fairness and are concurrent with the teachings of Islam,” said Parvaiz Siddiq, General Manager, SALAMA Islamic Arab Insurance Company. “As a pioneering, market-leader we are committed to providing the highest quality Takaful products to our customers.”
Industry forecasts predict the global Takaful personal insurance sector, including Health Takaful, will reach AED 17.8 billion by 2015. Saudi Arabia is expected to generate close to AED 3.3bn, followed by the UAE (AED 1.75bn) and Egypt (AED 1.7bn). All three are key markets for SALAMA.
Shahid Qazi, Assistant General Manager and Head of Health Takaful at SALAMA, said the switch from all embracing, publicly funded, healthcare to a greater reliance on private insurance, along with high population growth, will drive demand for Health Takaful.
“There is an expanding need for high-quality healthcare that is both accessible and affordable. However, access to publicly funded medical services is going to become increasingly restricted as governments seek to contain costs. Health Takaful will bridge the growing divide between public and private healthcare for those individuals who want Shariah compliant products and services.”
SALAMA launches Health Takaful
With over one billion Muslims worldwide, SALAMA expects the global Takaful market to develop rapidly over the next five years, from US $ 1.7 billion to between US $7.5 billion and US $10 billion, making it one of the fastest expanding financial industries in the world.
As part of its strategy for future growth, SALAMA has invested in developing its insurance products base in UAE and increased the capital of BEST Re – the world”s largest Islamic reinsurance company – from US $55m to US $100m. It is expected the capital enhancement of BEST Re will help improve Standard & Poors (S & P) BBB “Good” and A M Best”s B++ ”Very Good” ratings. SALAMA also intends to set up a Dhs 1 billion Re-Takaful company in Saudi Arabia and a Dhs 100m Takaful business in Malaysia.
Other plans include an Initial Public Offering of shares in the Islamic Arab Insurance Company, Saudi Arabia, in which SALAMA will have a major stake. The company has already been incorporated and final approval for the IPO is awaited. SALAMA has also initiated a new Family Takaful company in Senegal, SOSAR Life, a sister company for SOSAR Aman, a subsidiary of SALAMA. Other developments include the launch of Family Takaful in Algeria. In addition, SALAMA is finalising the procedures to establish a Family Takaful company in Egypt and has plans to launch a Family Takaful programme in the UAE.
On January 1, SALAMA established the first Shariah syndicate at Lloyd”s of London, with an initial underwriting capacity of US $72 million. The syndicate enjoys “A” security rating afforded to all Lloyd”s Syndicates by Standard and Poor”s, AM Best and Fitch. On February 12, in another pioneering move, SALAMA became the first UAE insurance company to offer its shares to nationals of other GCC countries. In the first week of trading more than one million SALAMA shares were snapped up by non UAE nationals.
SALAMA was listed on the Dubai Financial Market following an Initial Public Offering which helped raise the company”s capital to Dhs 1 billion. SALAMA has six Takaful companies and provides services in 70 countries through Tunisia headquartered BEST Re, the world”s biggest Re-Takaful company.