KUALA LUMPUR, Nov 16 (Reuters) - Malaysian Islamic
reinsurer MNRB Retakaful expects gross contributions from its
overseas businesses to exceed that of domestic operations in
five years, its chief executive said.
The firm, a subsidiary of Malaysian reinsurer MNRB
Holdings, sees growth opportunities in Indonesia, Brunei, Sri
Lanka and Pakistan as the sharia reinsurance industry grows,
said Ismail Mahbob.
"I am talking about 70 overseas and 30 Malaysia," Ismail
said in an interview, referring to gross contributions.
MNRB's overseas businesses are in 14 countries, including
Indonesia, Saudi Arabia and Kuwait. They account for about 31
percent of gross contributions.
Retakaful contributions in Malaysia grew by nearly 50
percent to $162 million in 2008, but the expansion is largely
confined to the retail sector, such as fire or motor insurance,
since the industry is still young.
MNRB Retakaful is also looking at business opportunities in
the Middle East, especially in the United Arab Emirates,
Kuwait, Saudi Arabia and Syria.
"You cannot ignore the Middle East market," Ismail said.
"It's highly fragmented but I can see areas that can be
developed or which we are developing now," he said.
He said a key problem in the Middle East was the lack of
homogeneity in the pool of assets underwritten by takaful
providers, making it difficult for retakaful firms to assess
and assume the risks.
"They (takaful operators) need an overview of their
underwriting business," Ismail said.
Global premiums in Islamic insurance, or takaful, total
about $2 billion to $3 billion and are expected to reach more
than $7 billion by 2015, industry figures show.
The industry is relatively small and many takaful firms
currently cede part of their risks to conventional reinsurance
firms because there is a lack of Islamic reinsurance capacity.
The Islamic reinsurance market is worth $1 billion, industry
estimates show.
Islamic insurance works on the basis of mutual help, with
members contributing to a pool of funds, which is used to
indemnify participants who suffer a loss.
The funds are invested according to the sharia which avoids
interest-bearing loans and gambling, pork and alcohol-related
activities. Profits made are distributed among members.
(Reporting by Cecile Lefort; Editing by Neil Fullick)
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