Published December 9, 2008

M'sian Islamic reinsurer eyes foreign markets

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(KUALA LUMPUR) Malaysian Islamic reinsurer ACR ReTakaful SEA wants to grow in Indonesia, Brunei and Bangladesh, seeing long-term prospects for the business despite a global economic downturn, the firm said on Friday.

Rising demand for sharia banking products would drive the takaful, or Islamic insurance, market, ACR ReTakaful SEA chief executive Zainal Abidin M Noor said.

'We are in a difficult period at the moment in the sense that (there are) a lot of uncertainties,' Mr Zainal told reporters at the company's launch.

'But we are still optimistic. We still see that the growth of takaful is still much better than the conventional insurance at least in respect of the non-life side.'

The company, which is a subsidiary of Dubai-based ACR ReTakaful Holdings Ltd, is also keen to tap opportunities in the Thailand and Philippines, he said.

ACR ReTakaful SEA will serve these countries from its base in Kuala Lumpur, he said.

Under Islamic insurance, members contribute to a pool of funds which is used to indemnify participants who suffer a loss.

Global premiums in Islamic insurance total about US$2 billion to US$3 billion and are expected to reach more than US$7 billion by 2015, according to industry figures.

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 US$1 billion, according to industry estimates.

ACR ReTakaful SEA has written about US$5 million of gross premium income, the company said.

ACR ReTakaful Holdings is a joint venture between Singapore-based ACR Capital Holdings Pte Ltd, Malaysian state investment arm Khazanah Nasional Bhd and the Dubai Banking Group. -- Reuters