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Friday, 2 November 2007

Kuala Lumpur, London Share Similarities To Boost Islamic Insurance

Kuala Lumpur - Eye on Malaysia
London - Eye on London
KUALA LUMPUR, Nov 2 (Bernama) -- The Kuala Lumpur-London alliance has a strong chance for success as the two share many similarities to boost Islamic insurance, said Deputy Finance Minister Datuk Dr Awang Adek Hussin."Both have the objectives of financial inclusion as key component in embarking on Islamic finance; both aim to have an efficient dual system that are seamlessly integrated; and, both share similar foundations of similar legal systems."These have set the stage for closer collaboration between KL and London by capitalising on each other's competitive and comparative advantages," he said in his keynote address titled "Strategic Collaboration as Global Strategy: Accelerating International Takaful Development", at the International Takaful Summit held in London today.The text of his speech was released here.The two-day summit, from November 1, is hosted by Islamic Banking and Finance Institute of Malaysia (IBFIM).It was attended by the Lord Mayor of City of London, Alderman John Stuttard, Datuk Zamani Abdul Ghani, deputy governor of Bank Negara Malaysia and Datuk Dr Adnan Alias, chief executive officer of IBFIM.Awang Adek said London, an international insurance and reinsurance centre, has vast investment and underwriting expertise and capabilities.KL, on the converse, he said, is a growing Islamic financial centre with strong niche in sukuk issuance and origination, takaful and retakaful, Islamic education and human resource development, and strong linkages with other key Islamic financial centres especially in the Middle East."By blending the competitive edge of the two centres, we can create synergistic strength through greater cooperation and collaboration."For this, the existing collaboration and interaction at the level of the shareholders of takaful companies will be a useful start," he said.He said UK-based companies (HSBC, Prudential and Aviva) had strong presence in the Malaysian takaful industry and recorded positive performances thus far."One of them, through this strategic tie-up, manages to attract over 65,000 customers (38 percent of whom are non-Muslims), with over RM125 million contributions in a year after introducing their family takaful products."This was achieved with the full support of the sales staff, of which 50 percent are non-Muslims. I just hope that new partnerships such as this will continue to flourish in the future," he said.Awang Adek said the industry must realise the potential for strategic alliance to address the current shortage of retakaful capacity."This is vital to ensure full cycle of takaful and retakaful operations are conducted in a syariah-compliant manner, without the need to rely on the doctrine of necessity (dharurah) to justify the use of reinsurance support."This can be achieved via the setting up of retakaful syndicates with financial backing of strong entities -- the likes of Lloyds," he said.He said prospects for KL and London to be the gateway for expanding takaful and retakaful business in Asia-Pacific and Europe respectively were bright."We are seeing the trend for foreign financial groups, including the UK-based, choosing Malaysia as the takaful hub for regional and international operations," he said.Similarly, he said, London has an enormous potential to be the gateway to reach out to the Muslim population in Europe, who were well-educated, highly informed on financial matters, and enjoyed a comfortable level of income.

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