The Role of International Insurance Companies The Role of International Insurance Companies in the opening of frontiers: development of in the opening of frontiers: development of

new productsnew products(Takaful)(Takaful)

Sohail JafferSohail JafferPartner, FWU GroupPartner, FWU Group

FWU group won the Euromoney Islamic Finance Awardfor being the "Best Islamic white label service provider“.

2

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

3

FWU’s definition of BancassuranceFWU’s definition of Bancassurance

«Bancassurance is defined as the delivery and distribution of a suitable range of tailored ‘bankable’ protection and long term savings and pension products designed to meet the lifecycle needs of the customer base of a bank or other financial institution.»

CustomerDemand Driven

4

Bancassurance - Asset Management - FactoringBancassurance - Asset Management - Factoring

FWU-GROUP‘s Core Business CompetenciesFWU-GROUP‘s Core Business Competencies

The group is well The group is well positioned to meet the life positioned to meet the life assurance, investment assurance, investment and pension needs of and pension needs of institutional and private institutional and private clients in Europe, Middle clients in Europe, Middle East and Asia with state of East and Asia with state of the art bancassurance & the art bancassurance & Shari‘a compliant Life Shari‘a compliant Life products.products.

GermanyGermanyLuxembourgLuxembourg

AustriaAustriaItalyItaly

FranceFrance Saudi Arabia Saudi Arabia

United Arab Emirates United Arab Emirates Pakistan Pakistan

MalaysiaMalaysia

KuwaitKuwait

5

FWU Group’s International Business ModelFWU Group’s International Business Model

Clone international Bancassurance

success

customer convenience

tailored ‘white label’ solutions

quality training and sales support

FWU Shari’ah Board &

Expertise

commission factoring solution

exclusive Retakaful solution

selection of service providers incl. custodian bank

Web-based POS & Admin System

Strategic Product

Partners

Structured asset management approach

Product & process innovation

6

Benefits of ‘White label’ Bancassurance SolutionBenefits of ‘White label’ Bancassurance Solution

Bank defines own commission level

Tailored customer solutions

Bank offers choice of both conventional

Bancassurance and Takaful products

Bank has choice to participate in other modules of the service value chain (custodian, brokerage, transaction banking)

Structured asset mgt. approach linked to open inv. architecture

Seamless integration into Bank’s own brand

7

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

8

FWU Group‘s international Bank distribution and FWU Group‘s international Bank distribution and Strategic product partnersStrategic product partners

Product administration, and claims management

Customer statements

Financial accounting

Filing with local regulatory authorities

New product development, Product launch support Product management,

Marketing & Training support

Structured asset mgt. apporach

Systems support to Strategic Product Partner and Bank Distribution Partner

Product enhancements & Shari’ah compliance

FWU Int. NetworkDubai, KL

& Luxembourg

Aman Insurance UAE

Al Ahli Takaful Company

KSA

EFU Life Insurance Pakistan

Takaful IkhlasMalaysia Bank is Custodian of all customer

funds in the Savings Plan

Bank Customers

Al Safat Takaful Company

Kuwait

Bank Distribution Partners FWU's existing distribution partners

include: NCB in KSA and ADCB in UAE

Local Life Insurance Product Partner

9

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

10

Main product features and customer benefitsMain product features and customer benefitsFWU Group‘s "White Label" Savings, Education and Retirement Plans – FWU Group‘s "White Label" Savings, Education and Retirement Plans – Product HighlightsProduct Highlights

Plan benefits are available to all bank customers

No medical examination of bank customer required (up to a defined limit)

Transparent and cost efficient structure

Accelerated sales process using FWU’s Point of Sale and Administration technology

Plan benefits are available immediately to all bank customers

All bank customers are insurable

Eliminates important psychological barrier

Greater customer comfort

Immediate risk cover for bank customer

Product features Customer Benefits

Bank customer convenience

11

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

US

D (

'00

0)

Year 1 Year 2 Year 3 Year 4 Year 5

Bank Income Growth – 5 year period

Conservative

AverageBest

Bank Annuity Income: Attractive Dynamics

Conservative Average Best

Base Assumptions:Number of Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 40,000 50,000Average duration 15 yearsAverage monthly contribution $ 200Lapsation rate 2 to 10 % p.aFund growth rate 7 % p.a

12

Cumulative Bank Income over a 5 year period

0

5

10

15

20

US

$ in

Mill

ions

Conservative Average Best

13

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

14

FWU’s fund selection and

allocation model

Structured Asset Management Approach

Overweights the winners & underweights the losers

Objective Investment

process

Agreed funds target universe

Enhance return by 15% to 25% p.a

15

Fund Selection Process

Based on Funds’ returns, risk and

correlation amongst each other, funds are ranked from best to worst => Each fund is given a score, based on its ranking.

Using the above rankings => Top eight funds are selected.

FWU‘s Dynamic Fund Selection and Allocation Model

16

FWU‘s Dynamic Fund Selection and Allocation Model

Allocation model (key value added)

Overweighting of the outperformer

Underweighting of the underperformer

17

Investment Proposal for Regular and Single Premium Savings Plans

FWU‘s Dynamic Fund Select & Allocation Model

Investment in External Islamic Mutual Funds

Strategy 1Strategy 1Conservative

Portfolio

Strategy 2Strategy 2BalancedPortfolio

Strategy 3Strategy 3Growth

Portfolio

Launched as internal funds ofFWU‘s local Takaful Product Partner

Strategy 4Strategy 4DynamicPortfolio

18

Investment Advantages of Pooling

0-10080:2050:5025:75

Conservativeportfolio

Balancedportfolio

Growthportfolio

Dynamicportfolio

Equity Pool

CashEquivalent

Pool

Direct Investment in: Sukuk Murabaha Trade-Finance

CustodianBank

19

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

20

The value added – why FWU GroupThe value added – why FWU Group

Customised product design

Product training and sales support

Business simulation model

Regional service hubs

Sophisticated Point of Sale and Administration System

Dynamic funds select and allocation model

Cost efficient Agency structure

Unique Retakaful arrangement

ENTREPRENEURIAL ENTREPRENEURIAL

PARTNERPARTNER

INNOVATIONINNOVATION

21

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Product Highlights and customer benefits

Dynamic Fund Selection and Allocation Model

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

22

FWU-Group‘s Exclusive Retakaful Pooling ArrangementFWU-Group‘s Exclusive Retakaful Pooling Arrangement

FWUFWU –– GROUPGROUP

Administrator-Data processing and administration Asset Management

Hannover Re(„AAA rated“,

3rd largest life Reinsurance)

Wakeel/Trustee- Fee Basis- 100% profit redistribution- Quard Hasna- Shari‘ah compliant Investments

Pooling Pooling ArrangementArrangement

The National Commercial Bank

Jeddah

Abu Dhabi Commercial

BankMajor Bank

Distribution-Partners Major Bank

KSA UAE Pakistan Malaysia

Bank distribution partners in the following markets

InsurancePartners

Al Ahli TakafulCompany

NCB/FWU / IFC

Dubai Islamic Insurance & Reinsurance

AMAN

Eastern Federal

Union LifeEFU

Takaful Ikhlas

SDN BHD

Establishment of insurance provider through joint venture or strategic cooperation agreement

Major Bank

Kuwait

Al Safat TakafulCompany

23

ContentsContents

FWU’s International Business Model

International Bank Distribution and Strategic Product Partners

Retakaful Pooling Arrangement

Structured Asset Management Approach

FWU’s Value Added

FWU’s Retakaful Pooling Arrangement

FWU Group

24

Dr. Manfred J. Dirrheimer andDr. Manfred J. Dirrheimer andPartnersPartners

Dr. Manfred J. Dirrheimer andDr. Manfred J. Dirrheimer andPartnersPartners

VHVVersicherungen,

Hanover

VHVVersicherungen,

Hanover

95%

FWU AGFWU AGMunich, Luxembourg, Dubai, Kuala LumpurMunich, Luxembourg, Dubai, Kuala Lumpur

FWU AGFWU AGMunich, Luxembourg, Dubai, Kuala LumpurMunich, Luxembourg, Dubai, Kuala Lumpur

80%74,9% 100% 10%

25,1% 25,1%

5%

100%

PREMIUM SELECT LUX S.A.

Luxembourg

PREMIUM SELECT LUX S.A.

Luxembourg

ATLANTICLUX Life Insurances S.A.

Luxembourg

ATLANTICLUX Life Insurances S.A.

Luxembourg

FWU Payment Services GmbH

Munich

FWU Payment Services GmbH

Munich

FWU Commission Factoring GmbH

Munich

FWU Commission Factoring GmbH

Munich

Al Ahli Takaful Company Jeddah, KSA

Swiss Re FrankonaRückvers. AG,

Munich

Swiss Re FrankonaRückvers. AG,

Munich

13,25% 30%

An entrepreneurial and institutional partnershipAn entrepreneurial and institutional partnership

90%

National Commercial Bank,

Jeddah, KSA

National Commercial Bank,

Jeddah, KSA

VHVVersicherungen,

Hanover

VHVVersicherungen,

Hanover

IFC International Finance CooperationWashington

IFC International Finance CooperationWashington

Wave Asset Management AG

Hamburg

Wave Asset Management AG

Hamburg

13,25%

FWU-GRUPPE

Branch

Bolzano

Branch

Bolzano

Branch Luxemburg

International HQ

Branch Dubai

Regional HQ ME

Branch Dubai

Regional HQ ME

Branch Kuala Lumpur

Regional HQ FE

Branch Kuala Lumpur

Regional HQ FE

7,5%

25

FWU Group – Profile FWU Group – Profile

The FWU Group is an entrepreneurial financial services group with headquarters in Munich, Germany.

Further offices are located in Luxembourg and Dubai Internet City (DIC).

Group shareholders include GE Frankona Re AG, an international re-insurer, and European banks and insurance companies.

Core activities are Bancassurance, Savings & Pension Plans and Asset Management.

Group subsidiaries include:

– an Asset Management Company (PREMIUM SELECT LUX S.A.)

– a Life Insurance Company (ATLANTICLUX S.A.)

Both are based and regulated in Luxembourg.

26

ContactContact

The information in this presentation does not constitute a sales offer, investment advice or an offer for the acquisition of financial products or instruments, and shall not in this regard imply legal obligations for the FWU Group or anybody else towards the readers of this presentation.

This presentation is solely intended to provide information on matters of interest for the readers and such information is not meant to replace the knowledge and the judgment of the readers who should make all appropriate inquiries.

Mr. Sohail JafferMr. Sohail JafferPartner, FWU Group2, Rue Sainte ZitheL-2763 Luxembourg

Email: s.jaffer@fwugroup.comTel: +352 – 2 61 97 700Fax: +352 – 2 61 97 800

Internet: www.fwugroup.com