Islamic finance awards 2008: Best takaful provider
The tide is changing in the global takaful market. In 2007 the UK-based world leader in insurance, Prudential, took a definitive step into the GCC takaful market with Bank Aljazira, one of Saudi Arabia’s smallest banks.
Bank Aljazira Takaful Ta’awuni
In June 2007, Bank Aljazira signed a memorandum of understanding with Prudential, which outlined the sale of Aljazira’s takaful arm, Takaful Ta’awuni division (TTD), into a new joint venture.
TTD was already well established but, under new Saudi Arabian Monetary Agency insurance regulations, the bank was required to separate insurance from banking via a new holding company. The law created a good opportunity for Prudential to leverage its international knowledge through Bank Aljazira’s platform. Mishari Al Mishari, director at Bank Aljazira, says: "The insurance market in Saudi Arabia is really set to take off. This business is entering its next phase of growth and development as people become more aware of the importance of takaful."
Unfortunately, because of irregularities in the Saudi cumulative investment law, the authorities halted all takaful sales for the last two months of 2007. However, these issues seem set to resolve themselves in the near future.
Aljazira has also shown its innovative drive with the development of two unique products. To meet special market needs, TTD developed a stand-alone Shariah-compliant alternative to the conventional personal accident plan – something that is commonplace in mature insurance markets but is yet to become established in the MENA region.