Transcript Slide 1

SALAMA GROUP
Sh. Khaled Bin Zayed Al Nehayan
Chairman
1
CONTENTS
• Takaful
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
2
• Takaful
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
3
WHAT IS TAKAFUL?
Takaful, an Arabic word meaning “joint guarantee”, is
•
•
•
•
•
a form of mutual insurance that strictly observes the rules and regulations of
Shari’a (Islamic law)
the Takaful system is based on mutual co-operation, responsibility, assurance,
protection and assistance between groups of participants
to uphold the principle of "bear ye one anothers burden"
described as a form of mutual insurance
in practice in Arabia from the 6th century
There are three (3) models based on which Takaful is
implemented:
•
•
•
Mudaraba Model
Wakalah Model
Combination of both
(Profit Sharing)
(Nominating another person)
4
WHY NOT COMMERCIAL INSURANCE?
• As agreed upon by most contemporary Muslim scholars,
commercial insurance is strictly forbidden in Islam because it
contains elements of:
– Al-Gharar (Uncertainty)
– Al-Maisir (Gambling)
– Riba (Interest)
5
Operational Issues of Takaful - Capital & Reserves
Conventional Approach
Takaful Approach
Company own insurance funds
Participants own Takaful funds.
Company is entrusted to manage it.
All reserves are available for
financial management and Solvency
Balance reserves after surplus
sharing are available for financial
management and Solvency
Shareholder capital is lender of last
resort. Recovery is linked to ROE
considerations
Shareholder capital is lender of last
resort, there are ROE considerations
but recovery in interest free loan
basis.
Source: Tokio Marine – WTC 2008
6
WHAT IS RE-TAKAFUL?
• Re-Takaful (reinsurance) provides the same services as Reinsurance industry
• shares risk with Takaful operators, in accordance with
requirements and practices of Shari’a
Takaful Holders
Takaful Operator
Retakaful Operator
7
• Takaful
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
8
SALAMA Journey
Foundation
&
Beginning
• Formed in 1979 - first Takaful Company in the world.
• Founding Shareholders donated initial capital of AED 10m.
• As per prevalent Takaful Model at that time, shareholders did not
participate in the profit of the company.
• Company started operation in UAE and established branches in
Saudi Arabia.
Restructuring
&
Acquisition
• In 2002 company was acquired by Bin Zayed Group along with
other investors.
• Financial restructuring of company commenced, company ‘s
Saudi Branches were divested in separate company based in
Bahrain.
• Decision in 2004 was made to expand company outside UAE
through an acquisition.
• IPO took place in July 2005 and capital was increased to AED
1 billion to finance acquisition and develop new products .
• Company was listed in DFM. It trades under symbol of “IAIC”
9
SALAMA GROUP - OVERVIEW
• Formed in Jan 2005 after acquisition of TARIIC in Bahrain
by UAE based Islamic Arab Insurance Company (SALAMA)
• SALAMA is the largest Takaful and Re-Takaful Company in
the world with a total Market Cap of US$ 850 million
• SALAMA has direct Takaful companies in UAE, Saudi
Arabia, Egypt, Algeria, Senegal and Jordan and the largest
Re-Takaful company in the world operating out of Tunisia
10
SALAMA - COMPETITIVE ADVANTAGES
• External
– A Leading Takaful and ReTakaful operator
– Extensive geographical
coverage and product
diversity
– Early entrant advantage
– Command “brand loyalty”
among clients
• Internal
– Robust growth since inception
– Strong underwriting principles
& conservative investment
strategy
– Highly professional and
experienced management
team
– 100+ years of combined
experience in the industry
11
MANAGEMENT STRUCTURE - HOLDING
Board of Directors
Saleh J. Malaikah
Vice Chairman &
CEO
Imran Haider
Chief Financial
Officer
BEST RE
Tunisia
Khalid Matein
Chief Investment
Officer
SALAMA
Algeria
SOSAR
Senegal
Mohammed Ashraf
Chief Internal
Auditor
ESIH
Egypt
Ighassan Davids
Chief Information
Officer
IAIC
KSA
SALAMA
UAE
12
OWNERSHIP % OF ENTITIES AT END OF 2007
SALAMA HOLDING
Paid Capital US$ 300m
Market Cap US$ 1 b (approx),
Free Float about 35%,
Foreign Ownership restricted to 25%,
Rating : S&P “BBB+”, A M BEST “A-”
TARIIC HOLDING
Paid Capital US$ 100m
SALAMA owner ship 99.6%
BEST RE
Paid up Capital
US$ 100m
TARIIC 77.75%
SALAMA
22.25%
SALAMA
Algeria
Paid up
Capital
US$ 6m
TARIIC
89.11%
SALAMA
Senegal
Paid up
Capital
US$ 1m
TARIIC
52.60%
ESIH
Egypt
Paid up
Capital
US$ 5m
TARIIC
51.15%
SALAMA
Saudi Arabia
Paid up
Capital
US$ 27m
SALAMA
30%
SALAMA
UAE - Virtual
Allocated
Capital
US$ 5m
SALAMA
100%
13
GROUP STRATEGY
•
•
•
Consolidation of Group of
Entities
To
adopt
common
and
standardized approach across
all functions to achieve
synergies
without
stifling
innovation and initiatives.
Organic Growth
To enhance our products
offering to include family,
health and other Takaful
products.
Geographical Expansion
Expand our geographical
spread through M & A and
entering new promising
markets.
Geographical
Organic
Expansion
Growth
Group
Strategy
Consolidation
Synergy
14
GEOGRAPHICAL EXPANSION
Target countries for geographical expansion depending on economic feasibility:
1.
2.
3.
4.
5.
6.
7.
Kuwait
Qatar
Oman
Turkey
Pakistan
Malaysia
Indonesia
Countries for future expansion
15
• Takaful
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
16
MARKET OVERVIEW
•
Takaful Industry is expected to grow
to US$15 billion by 2015
 Takaful markets are estimated is estimated US$ 5.6 billion in 2006¹
 Annual premium growth rates forecast to be 20% p.a.
 World insurance premium volume for both Life & Non-Life totaled
$3723 billion. 1
 The growth in world insurance premium real term was only 5% . 1
 The life insurance premium grew by 7.7% and non-life insurance
premium grew by 1.5% . 1
 60% of Muslim population across the globe is under 25 years of age
 Retail markets contribute very less to the gross premiums as compared
to the businesses
Source: 1 – Sigma 4/2007
17
KEY DRIVERS FOR TAKAFUL
INDUSTRY
•
Young and rapidly growing population
•
Rapid economic growth driven by oil, gas, construction, real estate & booming domestic demand
•
Increasing privatization & development would increase demand for corporate insurance
•
Implementation of compulsory insurance
•
Liberalization of Insurance industry in the GCC
•
GCC countries setting up local financial centers attracting foreign players
•
Growing awareness of Takaful
•
Rising income levels
•
Higher literacy rate
•
Increase in nuclear families
18
KEY GROWTH
Key Takaful Growth Regions
Europe
Middle East & North
Africa
Asia / Southeast Asia
Note: Countries with a significant Muslim Population
Source: MEED, International Cooperative and Mutual Insurance Federation – ICMIF, CIA World Fact book
19
Global Takaful Statistics
Region
Country
Gross Premium in USD m
2004
Africa
2006 Est
2004
2005
2006
Est
Egypt
2.5
3.0
4.0
0.1%
0.1%
0.1%
Mauritania
0.4
0.4
0.4
0.0%
0.0%
0.0%
Senegal
6.0
5.9
7.0
0.2%
0.1%
0.2%
112.0
171.6
203.1
3.2%
3.9%
4.6%
120.8
180.9
214.5
3.4%
4.1%
4.8%
3.1
3.5
4.2
0.1%
0.1%
0.1%
Pakistan
-
0.1
0.2
0.0%
0.0%
0.0%
Sri Lanka
2.4
4.2
6.8
0.1%
0.1%
0.2%
5.4
7.8
11.2
0.2%
0.2%
0.3%
Sudan
Sub-Total
East Indian
Sub- continent
2005
% Total
Bangladesh
Sub-Total
Source : Takaful Re – WTC 2008
20
Global Takaful Statistics
Region
Far East
Country
% Total
2004
2005
2006 est
2004
2005
2006 Est
Brunei
22.5
27.0
30.0
0.6%
0.6%
0.7%
Indonesia
73.5
74.2
80.1
2.1%
1.7%
1.8%
Malaysia
338.7
405.4
522.8
9.5%
9.1%
11.8%
0.1
0.1
0.0%
0.0%
0.0%
28.7
30.0
32.4
0.8%
0.7%
0.7%
474.3
552.4
687.8
13.4%
12.4%
15.5%
Bahrain
14.5
15.0
33.7
0.4%
0.3%
0.8%
Kuwait
53.6
82.9
90.0
1.5%
1.9%
2.0%
Qatar
24.7
33.6
50.0
0.7%
0.8%
1.1%
646.8
755.6
831.2
18.2%
17.0%
18.7%
30.6
41.5
65.0
0.9%
0.9%
1.5%
770.2
928.6
1,069.9
21.7%
20.9%
24.1%
Singapore
Thailand
Sub-Total
GCC
GWP in USD m
Saudi Arabia
UAE
Sub-Total
-
Source : Takaful Re – WTC 2008
21
Global Takaful Statistics
Region
Country
GWP in USD m
2004
Levant
Jordan
2005
% Total
2006 Est
2004
2005
2006
Est
12.9
14.5
17.3
0.4%
0.3%
0.4%
-
4.0
4.8
0.0%
0.1%
0.1%
0.8
1.0
1.5
0.0%
0.0%
0.0%
13.7
19.5
23.6
0.4%
0.4%
0.5%
2,163.8
2,750.0
3,685.0
61.0%
61.9%
83.0%
Sub-Total
2,163.8
2,750.0
3,685.0
61.0%
61.9%
83.0%
Grand Total
3,548.3
4,439.2
5,692.0
100%
100%
100%
Lebanon
Yemen
Sub-Total
Middle East (Non Arab)
Iran
Source : Takaful Re – WTC 2008
22
Global Takaful Statistics
USD Millions
Global Takaful / Islamic
Gross Contribution Income by region 2004 - 2006
11
5,000
8
4,000
3,685.0
5
2,750.0
3,000
2,163.8
`
2,000
24
20
1070
14
929
1,000
770
552
474
0
Af rica
Far East
688
120.8
180.9
214.5
2004
2005
2006 est
GCC
Levant
Middle East (Non Arab)
East Indian Sub-Continent
Source : Takaful Re – WTC 2008
23
Insurance Premium Density – premium per capita (US$)
World 554.8
Muslim World
Top Five
United Kingdom
Ireland
Switzerland
Denmark
France
Source: Sigma 4/2007
6,466.7
5,564.7
5,561.9
4,271.4
4,075.4
Qatar
UAE
Malaysia
Kuwait
Lebanon
683.5
585.4
292.2
227.2
181.5
Insurance Premium Density – premium per capita (US$)
Non Life
World 224.2
Muslim World
Top Five
Switzerland
United States
Luxembourg
Netherlands
Canada
Source: Sigma 4/2007
2,450.1
2,134.2
1,817.9
1,757.3
1,504.3
Qatar
UAE
Kuwait
Lebanon
Oman
652.6
495.6
186.3
123.6
119.4
Insurance Premium Density – premium per capita (US$)
Life
World 330.6
Muslim World
Top Five
United Kingdom
Ireland
Switzerland
France
Finland
Source: Sigma 4/2007
5,139.6
4,203.8
3,111.8
2,922.5
2,903.1
Malaysia
UAE
Lebanon
Kuwait
Qatar
189.2
89.8
57.9
40.9
30.9
Insurance Penetration – % of GDP
World
Top Five
United Kingdom
South Africa
Taiwan
South Korea
Switzerland
Source: Sigma 4/2007
16.50%
16.00%
14.50%
11.10%
11.00%
7.5%
Muslim World
Malaysia
Lebanon
Morocco
Jordan
Tunisia
4.90%
3.00%
2.90%
2.40%
2.00%
Insurance Penetration – % of GDP
Non Life
World
Top Five
Switzerland
United States
Netherlands
Slovenia
Canada
Source: Sigma 4/2007
4.90%
4.80%
4.30%
4.00%
3.90%
3.00%
Muslim World
Jordan
Morocco
Lebanon
Tunisia
Angola
Malaysia
2.20%
2.10%
2.00%
1.80%
1.70%
1.70%
Insurance Penetration – % of GDP
Life
World
Top Five
United Kingdom
South Africa
Taiwan
Hong Kong
Japan
Source: Sigma 4/2007
13.10%
13.00%
11.60%
9.20%
8.30%
4.50%
Muslim World
Malaysia
Lebanon
Indonesia
Morocco
Bangadesh
3.20%
0.90%
0.80%
0.80%
0.40%
Takaful Market
Source: The World Takaful Current Achievement & Future Outlook: BEST RE March 2006
30
• Takaful
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
31
FINANCIAL HIGHLIGHTS
32
FINANCIAL HIGHLIGHTS
Loss Ratio by Line of Business
80%
2006
80%
60%
40%
54%
54% 48%
46%
57%
61%
61%
46%
37%
41%
20%
0%
Fire
Accident
Engineering
Marine
Motor
Other
2006
100%
60%
30%
Combined Ratio by Line of Business
120%
80%
2007 Magt
Accts
103%
87%
90%
88%
85%
82%
SALAMA
Algeria
SALAMA
Senegal
81%
90% 87%
92%
88% 89%
2007 Magt
Accts
40%
20%
0%
BEST RE
ESIH Egypt
SALAMA UAE
SALAMA
GROUP
33
Thank you
34