Next step is to set up the first re-takaful in region
Noor Investment Group, which launched the Noor Islamic Bank (NIB) about four months ago, has secured a licence to operate an Islamic insurance company (takaful) in the UAE, according to a top official in the group.
Talking to The Business Weekly recently, Dr Ahmed Aljanahi, the group deputy chief executive, said the group is in the midst of setting up its second venture after setting up an Islamic bank with an initial paid-up capital of $1 billion.
The group, which nurses ambitions to make NIB the largest and fastest growing Islamic bank in the world, has also decided to establish the first Islamic re-insurance company (Re-takaful) in the region.
The insurance outfit which will have general and life insurance products to be on offer is likely to have three branches to start with, according to the group official. He also said the takaful will have an initial capital of Dh150 million, which could be raised subsequently as the business grows.
Re-insurance arrangement
Though the country has close to 50 insurance companies, both local and branch operations of foreign companies, only very few are Islamic.
The more serious problem with the Islamic insurance industry in the region is that it doesn't have a re-insurance arrangement to fall on and this leaves the insurance companies seeking reinsurance recourse from non-Islamic companies.
Though the sharia'a scholars do not see anything wrong in this arrangement, it is not viewed as an ideal way out by many.
However, the industry feels that Noor Investment Group may have to face greater challenges in the re-takaful business because a full-fledged reinsurance company in the conventional sector itself is yet to materialise in the UAE.
With the industry being set to see a fully regulated market and with DIFC fast becoming an energy insurance hub for the region, the UAE's potential as a growing insurance market is already acknowledged by experts.
By CL Jose
© The Business Weekly 2008
