Ghassan Marrouche, general manager of Takaful Emarat, said that while 2011 was a challenging year, the company still managed to cut its losses by 10 per cent from the year before. Image Credit: Gulf News Archives

Dubai: On March 5, Takaful Emarat will unveil the first investment fund conceived and developed in-house, which the company sees as a milestone in its fourth year of operations. All the necessary approvals have been obtained, including the crucial one from the company's Sharia board.

To be managed by Riyadh Capital, the open-ended fund — with up to 90 per cent of the investor's funds being guaranteed — has a multi-year tenure. Takaful Emarat currently has more than 70 savings and protection funds on offer, but developed by others.

This is a crucial year for the Islamic insurer, which is a joint venture between Al Buhaira National Insurance Co and Austria's Uniqa Group. At the end of the year the company will look to report its first profits, said Ghassan Marrouche, general manager.

"While 2011 was a challenging year, we still managed to bring down our losses by 10 per cent from the year before," said Marrouche.

"When the company is investing so much in infrastructure, turning a profit will prove difficult. But we now have the solid platform in terms of systems, products, marketing and distribution."

Marrouche does not agree with sentiments expressed in certain quarters that the market for Islamic insurance products is slowing down. "There is no such thing as a Takaful plan — the concept is Takaful," he added.


"The plan could be a protection and savings plan or it could be a protection plan like everyone else's. Be it conventional or Takaful, the insurer has to find a solution to the insured's needs when it comes to an [untimely] death, disability or retirement."

And Marrouche contends that Takaful insurers should stop being apologetic about selling Sharia-based products.

"Why some people are connecting Takaful to promoting Islam beats me," he said. "Yes, there are some aspects of the Sharia, but as insurers we have to make money for our participants and shareholders. For conventional insurers, it's only the shareholders that count.

"We have loadings and investments to take care of as any conventional insurer. The only thing that's missing is we isolate ourselves.

"We can sell to both Muslims and non-Muslims, but if we keep on underplaying it, the Takaful concept will never grow to its full potential."

On whether the lack of a knowledgeable broker network fully aware of Takaful products might be holding the process back, Marrouche said: "We are working with brokers hand-in-hand to give them all the support they need in the field. In addition, we have created an extensive direct sales force of our own."

Currently, selling policies to groups comprises 70 per cent of the company's business and the rest comes from insuring individuals.

Direct payment

Effective March 1, Takaful Emarat will want all its brokers to be just the via media when it comes to payments from clients. All cheques will have to be made out in the insurer's names.

This follows a recent directive from the Emirates Insurance Authority — the local regulator — that all payments issued by a client should be made out to the insurance company and not to the broker. This is a 180-degree turn from the current situation, whereby brokers have used such funds collected for their working capital needs. Usually, the insurers give an average 60-day credit period on such payments.

"Now that the law has come in we are complying with it in full," said Ghassan Marrouche. "We are the risk taker and it's only right that the payments made out are credited to us directly.

"This makes it clear that the insurer is protected from the time the policy is opened until it expires. The policyholder will not be affected if something happens to the broker.

"The UAE has always been a broker-driven market and I appreciate that. But they are not the risk takers, but as insurers we are best equipped to handle it — we have more of the resources, the legalities, etc. Then again, nobody is going to make millions out of holding on to the premium payments for 60 days."