02 Oct 2006
Dubai: American International Group (AIG), the world's biggest insurer by market value, launched its Islamic insurance business yesterday that will target some of the world's 1.2 billion Muslims.
AIG said it had set up a new company AIG Takaful headquartered in Bahrain with a capital of $15 million that will provide Sharia compliant insurance solutions or Takaful.
Charles Bouloux, AIG Takaful's chairman, told Gulf News the company will provide a range of products including accident & health, motor, personal contents, property and casualty while life insurance will be added a few months later.
The products will initially be sold through AIG's existing units that sell conventional insurance products in the Middle East region but AIG Takaful will develop its own capabilities over time.
"This is a new market and we will rely on selling insurance to people. It is not something that people are going to go out and buy," Bouloux said by phone from Bahrain.
"The Muslim community has traditionally not bought insurance and we must go and explain why this makes sense, that this is Sharia compliant so that they can feel comfortable with what they are buying."
AIG, which had global revenues of $108.9 billion in 2005, currently operates in more than 130 countries and reaches 65 million customers. The global insurance industry is estimated at $1.4 trillion a year.
AIG Takaful, which was licensed by the Central Bank of Bahrain in July 2006, will now aim to win a share of the about $2.5 billion a year Islamic insurance market that is growing at double-digit rates annually.
The company, whose supervisory board includes Shariah scholars like Shaikh Nizam Yaquby, Dr Mohammad Elgari and Dr Imran Usmani, will first roll out its services in the Middle East, expand into South East Asia in 2007 and later to the UK and North America.
Bouloux said AIG Takaful expected to write premiums of $10 million in the first 18 months.
By Arif Sharif
Gulf News 2006. All rights reserved.
