Since its inception last year, Noor Takaful has been striving to challenge the insurance industry's conventions to better serve its customers. Parvaiz Siddiq, Chief Executive Officer of Noor Takaful, explained to Isla MacFarlane how Noor Takaful's new products are a result of this initiative.
Noor Takaful was launched in January 2009, following Noor Investment Group's realisation of untapped opportunities for insurance and Takaful products in the GCC region and beyond. To coincide with the first anniversary of its inauguration, it launched a suite of individual family products with flexible protection, investment, and savings Takaful plans to cater to the national and expatriate residents of the UAE.
The five unique products are: 'Secure Invest', an investment-linked plan that will provide investors with 100 per cent capital protection; 'Executive Care', designed to protect and invest in an employer's most valuable asset, those key employees critical to the operations of an organisation; 'Edu Care', intended to secure a child's future education through regular savings; 'Secure Income', an investment plan to protect family income via a secured monthly income plan and 'Smart Save', a savings plan to encourage regular saving in anticipation of future financial needs.
The flexible products can be fully tailored with 10 available additional benefit options to directly meet an individual's needs and requirements. By participating in these plans, customers can also benefit from the Islamic insurance notion of surplus profit sharing.
All individual family plans provide multiple currency and globally diverse investment fund options and provide worldwide coverage, should the policy holder decide to leave the UAE.
Noor Takaful's Individual Family insurance products have been designed to meet the evolving income, investment and savings protection needs of increasingly sophisticated customers, at a time when the demand for Shari'ah-compliant insurance services in the UAE is increasing.
What makes your five new products unique?
The products are unique in that we have made it very easy for any consumer to buy the product. Our monthly contributions start from as little as AED 250; anyone, even someone earning as little as AED 2000, only has to spend 10 per cent of their income to buy our products and benefit from them. And someone who is earning as much as AED 100,000 can also buy our product, so what we've done is create a great deal of flexibility in the way the products are offered.
One of the unique things about Noor Takaful is that we make it easier for consumers to buy insurance. People can find the process of buying insurance very complex, difficult and with a lot of contracts and forms to fill in. We want to make the whole experience easy for the consumer. The brochure we're bringing out now is laid out very neatly in a friendly manner and is easy to understand.
The whole experience is being refined, so it is not just the product we are looking at, but the experience the consumer has in terms of buying insurance. For example if you look on our website, the whole concept of buying insurance online has been made easy, in terms of having policies delivered to you, which is unique in this region.
Our products are unique in the sense that they are flexible, they are easy to work with, they can be tailored. Our products don't come with prefixed additional benefits. We don't mind if someone just wants the basics - we will give them the option of 14 additional benefits from which they can choose, but if the consumer doesn't want any of them, that's fine - they can start on a low contribution. A person can start on a lower premium, and when they choose, they can increase the premium, so flexibility is one of the unique aspects of the products.
What gaps in the market do you think they are going to fill?
What are trying to do is give the consumer the ability to save. The population here is quite transient in terms of people coming and going, so what we are trying to do is create products that are short duration products. For example, the minimum duration of our plan is five years.
Also, there are many consumers who are at the lower end of the market, so there are many consumers in lower classes who aren't catered for. We are trying to direct products at them, and that's a large proportion of the UAE's population, especially in the expatriate community. Everybody wants to market products to the upper and upper middle classes, and there is a gap where nobody is coming down and working with the lower end of the market.
Obviously, we do need products that cater to the upper end of the market so we have done that also. For example, if someone gets a AED 100,000 bonus, we have a single premium plan. So we have looked at all the segments of the market and catered for everyone.
The other big area is UAE nationals. This rollout is more general to the market, but slowly the rollout will become more specific to the different segments of the market which we are looking at.
How long did it take you to develop these products?
Life insurance usually takes two to three months to develop, because there is a lot of work involved. But the bigger issue of launching a life insurance business takes about six to seven months, because you have to implement the processes and implement an IT system to support it, so that took us about eight months from start to finish as a project.
We did a lot of research in terms of the products that are available in the market, we looked at the plans that are offered by other Takaful companies in terms of benefits, how they are structured, how the customers are charged fees and things like that. And we said that we need to create products that match the best product that is available on the market. So our first task was not only to look at other Takaful companies, we looked at the products that are available in the market from international players and matched our products with that.
After we had done that we had the basics, then we said, "If I am an international consumer for an international company, and I am moving to Takaful, I'm not compromising the quality of the product or the benefits of the product." Having done that, we looked at unique features that other Takaful companies are able to offer. Having taken all that onboard, we started working on the products ourselves.
Now what we have done is to roll out these new products in the first stage, and we will roll out another set of products in the third quarter of this year.
Why did you choose to launch them at this particular time?
I think that this moment in time presents a wonderful opportunity. There is a crisis, but one thing that has been highlighted by that is the value of saving money, and not over extending yourselves in terms of credit and keeping money for protection, so I think that the crisis presented a nice opportunity to launch the products at this point.
What have been your most significant developments since starting operations?
One of the things that we have done since we have started is challenge the whole thing about insurance. Insurance has done the same thing for a number of years and other companies do the same thing because everyone does it; so we kept challenging what everyone else was doing and what it bought to the consumers. So for example, if you have to fill out a questionnaire of 20 questions, and there are 10 questions that don't make sense, we will challenge that and ask why the 10 questions are needed and what benefit, as an insurance company, we will get from the answers to those 10 questions.
This allows us to look at things in a totally different manner - in terms of the consumer. If a consumer answers a question there has to be a reason for asking that question. At the end of the day it makes it easier for the consumer to interact with us.
The other big thing that we were able to do was launch our online initiative: we have online motor insurance, online travel and we are bringing two more products online. We will continue to expand that platform, because the internet has become part of our lives, and we do so much on the internet, and we're too lazy to go out and do things! So it allows us to interact with the consumer easily and the consumer can take care of matters very conveniently. So that area is something we have taken as an important area, and we will continue to develop.
What are your initiatives for the rest of the year?
As well adding to our online platform we will be launching five new products by the end of the year, which will be more specifically targeted at specific segments of the market. To work towards customer quality and customer service. The company is now actively going out and seeking customer feedback and we are accumulating that data and bringing that feedback into play. It allows us to really address what our customers are saying, which will make a big difference. That's the theme that we are building on - to change the customer feel about insurance.
Are you looking to form any more strategic partnerships such as the one with Sharjah Islamic Bank?
Obviously - it's our objective to work with as many Islamic banks as possible and we are working with a number of them to put a partnership in place, but these relationships take time - seven, eight months from start to end. There is a lot that has been worked on, but I cannot disclose what has been worked on.
Do you have any plans to expand out of the UAE?
We are currently UAE-only. Our focus for 2010 is the UAE. In the future we will definitely venture out into new markets, but for this year our focus is to develop the UAE business properly, so that it becomes a solid business proposition for our shareholders. But after 2010 we shall definitely start focussing on other countries, starting with the GCC and then moving away from the GCC.
What do you think the greatest challenges are facing the Takaful industry?
Takaful has been a niche industry, a small section of the insurance market, so the bigger challenge will come with competition from large players, so there will be clashes in the Takaful industry. The good thing is that Takaful has just started, and we should not allow any Takaful companies to fail. The biggest challenge is to allow Takaful companies to grow and meet their obligations, and they should not fail. If any Takaful company anywhere does fail then the whole concept can be questioned and doubted. To manage Takaful companies in such a way that that does not happen is the industry's biggest challenge.
© Islamic Business and Finance 2010
