Jens Reisch, country manager for Allianz in Indonesia and CEO of Allianz Life Indonesia, has good news about Allianz's Islamic insurance products offered in the country: "We have surpassed our target for 2006 by a wide margin, and this encourages us to develop our Sharia division further."
"We are holding continuous training sessions to certify Sharia agents. Today, we have more than 2,100 certified financial planners countrywide," Reisch continues. One-stop solutions are the call of the day. The customer will be able to obtain all insurance products from a single contact person or insurance agent.
Allianz Life Indonesia started selling Sharia insurance in April 2006. By the end of 2006, more than 2,200 policies with premiums of 15.8 billion Indonesian rupiahs (about 1.3 million euros) had been sold; this translates to more than double the target in terms of the number of policies, as well as three times the original target in terms of premiums collected.
Islamic insurance: A growing market
At the press gathering announcing encouraging results for Allianz's Sharia business in Indonesia: (from left) Srikandi Utami, Petrus Siregar, Jens Reisch, and Mohamad Hidayat, Chairman of the Sharia Advisory Board of Allianz Indonesia
High aims for 2007
Jens Reisch is aiming even higher in 2007. "We are expanding our Sharia product range. For example, the Sharia Benefit Account allows for a lower monthly premium and makes insurance affordable to a larger customer base. We will soon offer Sharia-based individual health insurance, and we're also working with our banking partners to develop a Sharia unit-linked product," he adds.
With new products and strengthened sales channels, Reisch feels confident enough to raise the bar for 2007. Reisch: "We are optimistic that we can double our new Sharia business in 2007 compared to 2006."
Property & casualty products
Allianz Utama, Allianz's non-life insurance company in Indonesia, started offering Sharia products in the second quarter of 2006. Allianz Utama issued nearly 200 property and 140 motor insurance policies amounting to premiums of 1.35 billion rupiahs (about 110,000 euros).
"The number is still small, but we are actually very satisfied," says Victor Sandjaja, CEO of Allianz Utama Indonesia. "The business started smoothly, and we are on the right track towards more success in Sharia business this year." Sandjaja believes that "the outlook is very positive for Sharia insurance, but there is still a way to go." Allianz Utama is also developing new products, for example, a Sharia personal accident insurance.
License for Bahrain
In the Middle East and North Africa, Allianz Group is also focusing on the promising market for Islamic insurance (also known as Takaful insurance). Allianz's French subsidiary AGF coordinates the business in the region and has recently established "Allianz Takaful" in Bahrain.
"We are responding to the need and the market potential in Islamic countries," says Hugues de Roquette-Buisson, AGF regional manager for Africa and the Middle East. "These products are a good way to familiarize the people with the concept of insurance."
"Takaful is a good lever to expand our activities in the region," he adds. Takaful policy sales worldwide have been growing dynamically at rates between 15 and 18 percent. Premiums for Takaful insurance today have reached roughly 1.7 billion US dollars. This is still less than one percent of worldwide insurance premiums.
"By 2020, worldwide Takaful premiums could increase tenfold," says de Roquette-Buisson. According to consumer surveys conducted by the Central Bank of Bahrain, up to 70 percent of the conventional savings, health and education plans business could move to Takaful products, given the same level of customer service, quality and profitability.
Business in Saudi Arabia and Egypt
Allianz has also successfully started business in Saudi Arabia. The Assurance Saudi Fransi Cooperative (Taaounia) Insurance company, a joint venture between AGF and Saudi Fransi Bank, was granted a license to operate in October 2006. The company will assume the conventional insurance business already run on the Saudi market by AGF's off-shore Bahraini company, Insaudi.
Assurance Saudi Fransi will operate in all lines of business, including life and non-life, with Takaful products. Through an existing bancassurance agreement with the bank, Takaful education plans and retirement insurance have been offered since December 2006. Allianz's Lebanese company, Société Nationale d’Assurances, has provided the know how and back office for these products.
AGF and Bank Saudi Fransi have now successfully completed the mandatory IPO for 31 percent of the capital. Indeed, the IPO was largely over-subscribed. After incorporation, distribution will turn multi-channel to include both agents and brokers.
De Roquette-Buisson sees the Gulf countries and particularly Saudi Arabia as most promising markets for Islamic insurance: "If things go well, we hope to expand to other markets in the future. For example, in Egypt we've been offering products with Sharia-compliant funds and are considering the introduction of fully-fledged Takaful insurance."
Takaful: Islamic insurance
Takaful (joint guarantee) respects that Islamic Law (Sharia) prohibits traditional insurance which Sharia regards as a bet. With Takaful insurance, a community of insured parties pays into a fund, which then aids each member in case of a loss. The insurance company only receives a set fee for managing the risk pool, and a share of the money invested according to the rules of the Koran.
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