AIA Malaysia gets international takaful licence
Sep 24th, 2008 by Takaful
Source: The Edge Daily, 24th September 2008
American International Assurance Bhd (AIA Malaysia) announced yesterday that it had received an International Takaful Operator (ITO) licence from Bank Negara Malaysia (BNM).
The licence allows the insurer to undertake takaful business in foreign currency, mainly in US dollars, to residents and non residents. However, this does not put the insurer in direct competition with the others in the already competitive market of Takaful insurance.
At the moment the US dollar denominated Takaful insurance products are sold only in Labuan. The market for this segment of business is niche as the premiums are high.
In a statement yesterday, AIA said that the licence allows AIA Malaysia’s wholly owned subsidiary, AIA Takaful International Bhd (ATIB), to carry out composite (family and general) takaful and re-takaful business in international currencies.
“It is a significant step for AIA Malaysia as we enter the growing Islamic financial market as a niche player offering consumers the choice of takaful solutions in international currencies — something that has not been largely available locally,” said AIA Malaysia’s chief executive officer and director of ATIB Khor Hock Seng in a statement yesterday.
“This will enable us to tap the growing takaful global market and contribute to the expansion of ATIB’s takaful infrastructure. It will also establish Malaysia as a regional centre of excellence for AIA,” said Khor.
“From an organisational perspective, ATIB is also strategically positioned to leverage on the established infrastructure of AIA Malaysia as it adopts the shared services model which will help ensure overall efficiency and effectiveness,” he added.
AIA Malaysia noted that as one of the few players in Malaysia offering takaful solutions in international currencies, ATIB is well positioned to benefit from the steady growth of the global and domestic Islamic finance sector and the Malaysia International Islamic Financial Centre’s (MIFC) initiative to promote Malaysia as a major hub for international Islamic finance.
“The MIFC initiative is an internationally recognised platform that positions Malaysia as an international Islamic financial hub for International Takaful, Sukuk Origination, Islamic Wealth and Fund Management, International Islamic Banking and Human Capital Development,” said AIA Malaysia.
The MIFC is a collaborative effort by Malaysia’s financial and market regulators, which includes BNM, Securities Commission Malaysia, Labuan Offshore Financial Services Authority and Bursa Malaysia as well as industry participation from the banking, takaful and capital market sectors in Malaysia.