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SALAMA GROUP Sh. Khaled Bin Zayed Al
NehayanChairman
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2
CONTENTS
• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
• Takaful
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• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
• Takaful
4
WHAT IS TAKAFUL?Takaful, an Arabic word meaning “joint guarantee”, is• a form of mutual insurance that strictly observes the rules and
regulations of Shari’a (Islamic law) • the Takaful system is based on mutual co-operation, responsibility,
assurance, protection and assistance between groups of participants• to uphold the principle of "bear ye one anothers burden"• described as a form of mutual insurance• in practice in Arabia from the 6th century
There are three (3) models based on which Takaful is implemented:
• Mudaraba Model (Profit Sharing)• Wakalah Model (Nominating another person)• Combination of both
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WHY NOT COMMERCIAL INSURANCE?
• As agreed upon by most contemporary Muslim
scholars, commercial insurance is strictly
forbidden in Islam because it contains elements
of:
– Al-Gharar (Uncertainty)
– Al-Maisir (Gambling)
– Riba (Interest)
Operational Issues of Takaful - Capital & Reserves
6Source: Tokio Marine – WTC 2008
7
WHAT IS RE-TAKAFUL?
• Re-Takaful (reinsurance) provides the same services
as Re-insurance industry
• shares risk with Takaful operators, in accordance with
requirements and practices of Shari’a
Takaful Holders Takaful Operator Retakaful Operator
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• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
• Takaful
SALAMA Journey
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Foundation &
Beginning
• Formed in 1979 - first Takaful Company in the world.• Founding Shareholders donated initial capital of AED 10m. • As per prevalent Takaful Model at that time, shareholders did not participate in the profit of the company.
• Company started operation in UAE and established branches in Saudi Arabia.
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SALAMA GROUP - OVERVIEW
• Formed in Jan 2005 after acquisition of TARIIC in Bahrain by UAE based Islamic Arab Insurance Company (SALAMA)
• SALAMA is the largest Takaful and Re-Takaful Company in the world with a total Market Cap of US$ 850 million
• SALAMA has direct Takaful companies in UAE, Saudi Arabia, Egypt, Algeria, Senegal and Jordan and the largest Re-Takaful company in the world operating out of Tunisia
SALAMA - COMPETITIVE ADVANTAGES
• External– A Leading Takaful and
Re-Takaful operator – Extensive geographical
coverage and product diversity
– Early entrant advantage
– Command “brand loyalty” among clients
• Internal– Robust growth since
inception– Strong underwriting
principles & conservative investment strategy
– Highly professional and experienced management team
– 100+ years of combined experience in the industry
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MANAGEMENT STRUCTURE - HOLDING
Board of Directors
Saleh J. MalaikahVice Chairman &
CEO
Khalid MateinChief Investment
Officer
Mohammed AshrafChief Internal
Auditor
Imran HaiderChief Financial
Officer
Ighassan DavidsChief Information
Officer
BEST RETunisia
SALAMAAlgeria
SOSARSenegal
ESIHEgypt
IAICKSA
SALAMAUAE
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OWNERSHIP % OF ENTITIES AT END OF 2007
SALAMA HOLDINGPaid Capital US$ 300m
Market Cap US$ 1 b (approx), Free Float about 35%,
Foreign Ownership restricted to 25%,
Rating : S&P “BBB+”, A M BEST “A-”TARIIC HOLDING
Paid Capital US$ 100mSALAMA owner ship 99.6%
BEST REPaid up Capital
US$ 100mTARIIC 77.75%SALAMA 22.25%
SALAMAAlgeriaPaid up Capital
US$ 6m TARIIC 89.11%
SALAMASenegalPaid up Capital
US$ 1m TARIIC 52.60%
ESIHEgypt
Paid up Capital
US$ 5m TARIIC 51.15%
SALAMASaudi Arabia
Paid up Capital
US$ 27m SALAMA
30%
SALAMAUAE - Virtual
Allocated Capital
US$ 5m SALAMA
100%
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GROUP STRATEGY
• Consolidation of Group of Entities
To adopt common and standardized approach across all functions to achieve synergies without stifling innovation and initiatives.
• Organic GrowthTo enhance our products offering to include family, health and other Takaful products.
• Geographical Expansion
Expand our geographical spread through M & A and entering new promising markets.
15
GEOGRAPHICAL EXPANSION
Target countries for geographical expansion depending on economic feasibility:
1. Kuwait2. Qatar3. Oman4. Turkey5. Pakistan6. Malaysia7. Indonesia
Countries for future expansion
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• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
• Takaful
MARKET OVERVIEW
Takaful markets are estimated is estimated US$ 5.6 billion in 2006¹
Annual premium growth rates forecast to be 20% p.a. World insurance premium volume for both Life & Non-Life totaled
$3723 billion. 1 The growth in world insurance premium real term was only 5% . 1 The life insurance premium grew by 7.7% and non-life insurance
premium grew by 1.5% . 1 60% of Muslim population across the globe is under 25 years of
age Retail markets contribute very less to the gross premiums as
compared to the businesses
• Takaful Industry is expected to grow to US$15 billion by 2015
17Source: 1 – Sigma 4/2007
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KEY DRIVERS FOR TAKAFUL INDUSTRY
• Young and rapidly growing population
• Rapid economic growth driven by oil, gas, construction, real estate & booming domestic demand
• Increasing privatization & development would increase demand for corporate insurance
• Implementation of compulsory insurance
• Liberalization of Insurance industry in the GCC
• GCC countries setting up local financial centers attracting foreign players
• Growing awareness of Takaful
• Rising income levels
• Higher literacy rate
• Increase in nuclear families
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KEY GROWTH
EuropeMiddle East & North AfricaAsia / Southeast Asia
Key Takaful Growth Regions
Note: Countries with a significant Muslim PopulationSource: MEED, International Cooperative and Mutual Insurance Federation – ICMIF, CIA World Fact book
Global Takaful Statistics
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Region Country Gross Premium in USD m % Total
2004 2005 2006 Est 2004 20052006
Est
Africa Egypt 2.5 3.0 4.0 0.1% 0.1% 0.1%
Mauritania 0.4 0.4 0.4 0.0% 0.0% 0.0%
Senegal 6.0 5.9 7.0 0.2% 0.1% 0.2%
Sudan 112.0 171.6 203.1 3.2% 3.9% 4.6%
Sub-Total 120.8 180.9 214.5 3.4% 4.1% 4.8%
East IndianSub- continent Bangladesh 3.1 3.5 4.2 0.1% 0.1% 0.1%
Pakistan - 0.1 0.2 0.0% 0.0% 0.0%
Sri Lanka 2.4 4.2 6.8 0.1% 0.1% 0.2%
Sub-Total 5.4 7.8 11.2 0.2% 0.2% 0.3%
Source : Takaful Re – WTC 2008
Global Takaful Statistics
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Source : Takaful Re – WTC 2008
Region Country GWP in USD m % Total
2004 2005 2006 est 2004 2005 2006 Est
Far East Brunei 22.5 27.0 30.0 0.6% 0.6% 0.7%
Indonesia 73.5 74.2 80.1 2.1% 1.7% 1.8%
Malaysia 338.7 405.4 522.8 9.5% 9.1% 11.8%
Singapore - 0.1 0.1 0.0% 0.0% 0.0%
Thailand 28.7 30.0 32.4 0.8% 0.7% 0.7%
Sub-Total 474.3 552.4 687.8 13.4% 12.4% 15.5%
GCC Bahrain 14.5 15.0 33.7 0.4% 0.3% 0.8%
Kuwait 53.6 82.9 90.0 1.5% 1.9% 2.0%
Qatar 24.7 33.6 50.0 0.7% 0.8% 1.1%
Saudi Arabia 646.8 755.6 831.2 18.2% 17.0% 18.7%
UAE 30.6 41.5 65.0 0.9% 0.9% 1.5%
Sub-Total 770.2 928.6 1,069.9 21.7% 20.9% 24.1%
Global Takaful Statistics
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Source : Takaful Re – WTC 2008
Region CountryGWP in USD m % Total
2004 2005 2006 Est 2004 20052006Est
Levant Jordan 12.9 14.5 17.3 0.4% 0.3% 0.4%
Lebanon - 4.0 4.8 0.0% 0.1% 0.1%
Yemen 0.8 1.0 1.5 0.0% 0.0% 0.0%
Sub-Total 13.7 19.5 23.6 0.4% 0.4% 0.5%
Middle East (Non Arab) Iran 2,163.8 2,750.0 3,685.0 61.0% 61.9% 83.0%
Sub-Total 2,163.8 2,750.0 3,685.0 61.0% 61.9% 83.0%
Grand Total 3,548.3 4,439.2 5,692.0 100% 100% 100%
Global Takaful Statistics
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Source : Takaful Re – WTC 2008
120.8 180.9 214.5
474552 688
770
929
107014
20
24
2,163.8
2,750.0
3,685.0
5
8
11
0
1,000
2,000
3,000
4,000
5,000
2004 2005 2006 est
USD Millions
Global Takaful / Islamic Gross Contribution Income by region 2004 - 2006
Africa Far East GCC Levant Middle East (Non Arab) East Indian Sub-Continent
`
Insurance Premium Density – premium per capita (US$)
Top FiveTop FiveUnited Kingdom 6,466.7Ireland 5,564.7Switzerland 5,561.9Denmark 4,271.4France 4,075.4
World 554.8
Muslim WorldQatar 683.5UAE 585.4Malaysia 292.2Kuwait 227.2Lebanon 181.5
Source: Sigma 4/2007
Insurance Premium Density – premium per capita (US$)
Top FiveTop FiveSwitzerland 2,450.1United States 2,134.2Luxembourg 1,817.9Netherlands 1,757.3Canada 1,504.3
World 224.2
Muslim WorldQatar 652.6UAE 495.6Kuwait 186.3Lebanon 123.6Oman 119.4
Non Life
Source: Sigma 4/2007
Insurance Premium Density – premium per capita (US$)
Top FiveTop FiveUnited Kingdom 5,139.6Ireland 4,203.8Switzerland 3,111.8France 2,922.5Finland 2,903.1
World 330.6
Muslim WorldMalaysia 189.2UAE 89.8Lebanon 57.9Kuwait 40.9Qatar 30.9
Life
Source: Sigma 4/2007
Insurance Penetration – % of GDP
World 7.5%
Top FiveTop FiveUnited Kingdom 16.50%South Africa
16.00%Taiwan
14.50%South Korea
11.10%Switzerland
11.00%
Muslim WorldMalaysia 4.90%Lebanon 3.00%Morocco 2.90%Jordan 2.40%Tunisia 2.00%
Source: Sigma 4/2007
Insurance Penetration – % of GDP
World 3.00%
Top FiveTop FiveSwitzerland
4.90%United States
4.80%Netherlands
4.30%Slovenia 4.00%Canada 3.90%
Muslim WorldJordan 2.20%Morocco 2.10%Lebanon 2.00%Tunisia 1.80%Angola 1.70%Malaysia 1.70%
Non Life
Source: Sigma 4/2007
Insurance Penetration – % of GDP
World 4.50%
Top FiveTop FiveUnited Kingdom 13.10%South Africa
13.00%Taiwan
11.60%Hong Kong
9.20%Japan
8.30%
Muslim WorldMalaysia 3.20%Lebanon 0.90%Indonesia 0.80%Morocco 0.80%Bangadesh 0.40%
Life
Source: Sigma 4/2007
Takaful Market
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Source: The World Takaful Current Achievement & Future Outlook: BEST RE March 2006
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• SALAMA Group Overview
• Takaful market and potential
• Financial Highlights
• Takaful
32
FINANCIAL HIGHLIGHTS
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FINANCIAL HIGHLIGHTS
54% 48%
41%46% 46%
54% 57%61% 61%
80%
37%30%
0%
20%
40%
60%
80%
Fire Accident Engineering Marine Motor Other
Loss Ratio by Line of Business2006
2007 MagtAccts
87%88%
85%
90%82% 81% 90% 87%
103%
92% 88% 89%
0%
20%
40%
60%
80%
100%
120%
BEST RE SALAMAAlgeria
SALAMASenegal
ESIH Egypt SALAMA UAE SALAMAGROUP
Combined Ratio by Line of Business2006
2007 MagtAccts
Thank you
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