Solidarity report, Kashif Dayo


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Solidarity report, Kashif Dayo

  1. 1. Islamic Banking & Finance [Type the company name] Islamic Banking & Finance [Type the document subtitle] [Pick the date] Submitted To: Submitted By: Sir Azeem Pirani Kashif Dayo MBABF-1156103Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 1
  2. 2. Islamic Banking & FinanceS.No: Topic Page No: Acknowledgment 1 1. Introduction 2 i. The subsidiaries, associates and joint venture of the Solidarity Group. 3 ii. The Shari’a Supervisory Board 4 2. Area of specialization 4 3. Financial positions 4 4. Product line 5 i. General Takaful 5 ii. Family Takaful 5 iii. Asset Management 6 5. Future plans 6 6. Customer/Public/shareholders/regulators view about the Solidarity 7 Group 7. Bibliography 8Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 2
  3. 3. Islamic Banking & FinanceAcknowledgmentAll the praise to Almighty Allah the most beneficent and merciful who gave me this opportunityto compile this term project of Islamic & Banking Finance Course.I would like to express my gratitude to all the people that were involved both directly andindirectly in the preparation of this report. I apologize to the people whose names that I havenot mentioned, but their contribution is highly appreciated by me.I would like to thank my course instructor Azeem Pirani for guiding me and for giving me theopportunity to initiate this project. More specifically, I would like to thank him for imparting histime and wisdom.This IBF report is made with a great deal of my efforts, I worked hard on this project and gavemy best for making this report best one.Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 3
  4. 4. Islamic Banking & Finance 1. IntroductionSolidarity Group Holding is committed to becoming the world’s leading international Islamic-oriented financial-service group in the world. The company plans to offer superior returns,world-class customer service, avant-grade packages and innovative thinking to its shareholders.During 2009, the Group had three key areas of activity; General Takaful, Family Takaful, andAsset Management and Investments. These were supported by centralized Corporate Servicescovering Human Resources, Information Technology, Legal and Compliance, Finance andCorporate Communications. 2009 marked the first full year of operation post the 2008restructuring of company’s two main subsidiaries, Solidarity General Takaful and SolidarityFamily Takaful. Group’s both entities have witnessed healthy growth and have furtherstrengthened their positioning in its home market despite the prevailing challenges.Solidarity Groups authorized capital of $500 million and its paid-up capital of $220 million arebeing invested toward further improving its performance and quality of client services. As aresponsible corporate member of the communities it serves, the company values innovation,integrity, social responsibility, teamwork and partnership as well as transparency as part of itsday-to-day operations.Solidarity’s vision is to be a leading international Islamic-oriented financial services groupgenerating superior returns to shareholders. On the regional and international fronts, theGroup continued its strategic positioning and consolidation, especially in the markets of Jordan,Saudi Arabia, Malaysia and EgyptShaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 4
  5. 5. Islamic Banking & Finance i. The subsidiaries, associates and joint venture of the Solidarity Group. Entity Holding Country of Nature of incorporation activities Subsidiaries 1. Solidarity General Takaful BSC (c) 100% Kingdom of Takaful Bahrain 2. Solidarity Family Takaful BSC (c) 100% Kingdom of Takaful Bahrain 3. Takaful Islamic Insurance 100% Kingdom of Takaful Company EC (“TIIC”) Bahrain 4. Islamic Takaful and ReTakaful 100% Bahamas ReTakaful Company (Bahamas) Ltd (“ITRC”) 5. Solidarity Takaful S.A. 100% Luxembourg Takaful Luxembourg 6. Solidarity Fund Company (“SFC”) 100% Kingdom of Investment and related funds: Bahrain Management Solidarity International Real Estate Fund Solidarity Leasing Fund Solidarity Global Growth Fund Solidarity European Real Estate Fund 7. Solidarity Aman Fund BSC (c) 100% Kingdom of Investment (“SAF”) Bahrain management 8. Solidarity Asia Takaful Fund 100% Cayman Islands Investment Management 9. Solidarity Family Takaful Egypt Co 100% Egypt Takaful Associates 10. Ensurion WLL 25% Kingdom of Insurance Bahrain management 11. First Insurance Company 26.14% Jordan Takaful Joint venture 12. MAA Takaful Berhad 25% Malaysia TakafulShaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 5
  6. 6. Islamic Banking & Finance ii. The Shari’a Supervisory BoardThe Shari’a Supervisory Board reviews all the company’s operations in accordance with theBalance Sheet of every year. The board reviews and confirms the implementations of theprinciples and guidelines governing the relationship between the policyholders and shareholderin order to identify the right of each side. The Board gives its Shari’a directives for Takafultransactions and answers the queries made by the management.The company’s management is responsible for ensuring that the company conducts its businessin accordance with Islamic Shari’a rules and principles. It is The Shari’a Supervisory Board’sresponsibility to insure that all the Takaful transaction is Shari’a Complaint. 2. Area of specializationSolidarity group is one of the largest Takaful Group of the world. Group basically specialized inTakaful, and group has been proved to be a successful Takaful company in the world. Theawards are the witnesses of group’s success, i.e. Bahrain Based Solidarity accepts twoPrestigious Awards including Takaful Insurer of the Year for the second consecutive year (2010-11). 3. Financial positionsThe Group showed good turn around despite continued global economic meltdown and anextremely challenging operational environment. The Group achieved an operational breakevenpoint during 2009; however, the creation of conservative and prudent exceptional investmentprovisions to the extent of US$7.20 million has resulted in a loss of US$7.24 million for the yearended 31.12.2009. Most of these provisions relate to re-evaluation of real estate propertiesacross geographies; given the slow paced yet steady improvement in the world economy, likelyfuture pick up in values can easily result in the reversal of these provisions to the benefit of theGroup.The Gross contributions of Family Takaful increased by 11% compared to 2008. The FamilyTakaful Business in Bahrain has achieved a sizeable market share in Group Life & Medicalportfolios.The gross contributions of General Takaful increased by 50% from US$14.00 million in 2008 toUS$20.96 million in 2009. The operations continue to show remarkable growth sincecommencement of operations in Bahrain in 2004. The Company has achieved this growth byShaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 6
  7. 7. Islamic Banking & Financeacquiring the insurance program of major clients like Gulf Petrochemical Industries Company(GPIC) as well as through enhanced market penetration using diverse distribution channels. 4. Product lineThe Group primarily operated as a Takaful provider and its primary lines of business comprisegeneral Takaful, family Takaful and asset management and Investments operations. These weresupported by centralized Corporate Services covering Human Resources, InformationTechnology, Legal and Compliance, Finance and Corporate Communications. i. General TakafulSolidarity General Takaful includes Marine, Non-Marine & Motor Takaful. Solidarity GeneralTakaful continued to expand its retail distribution through a mix of brokers and financialinstitutions. It opened a sales desk at various distributor locations during 2009. The success ofimplementing a toll free 24x7 service for assisting its motor insurance customers is very muchappreciated by customers. This service includes road side assistance and in the event of a claim,car replacement service.In order to facilitate the renewal of motor policies and registration at Traffic Department,Solidarity General is one of the few companies that have teamed up with Bahrain Government’se-gov. ii. Family TakafulSolidarity Family Takaful BSC(c), Bahrain has continued to achieve impressive results during theyear 2009. The gross written contribution for the year amounted to US$16.81 million of whichindividual Takaful policies comprised US$ 3.09 million; savings and investments US$2.63 million;as well as US$11.09 million from group life, credit life and medical policies. Compared to the fullyear operations of these classes of business in 2008, this represents a growth of 9% (2008US$15.43 million).The company provides Family Takaful protection and savings plans, Group Life Takaful andMedical Takaful covers. With this increased market presence, SFT has established itself as a fullfledged family Takaful and medical Takaful provider in the Kingdom. SFT has expanded itsdistribution channels and modified some product features in order to become morecompetitive.Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 7
  8. 8. Islamic Banking & Finance iii. Asset ManagementSolidarity’s Shari’a-compliant portfolio of investments, which covers proprietary investmentfunds regulated by the CBB, external funds and strategic investments, performed well duringthe year, with no impairment. As a result, the Company’s Asset Management activitiescontinued to make a sizeable contribution to the Group’s overall income.The Group’s diversified Fund portfolio, with a well balanced risk profile, comprises mudaraba,leasing, sukuk, real estate, equities and other Islamic instruments. In addition, the AssetManagement division continued to manage the Company’s liquidity requirements; monitor theprogress of Solidarity’s strategic investments; provide structuring advisory services to supportthe Company’s ventures and acquisitions; and develop new investment products forpolicyholders, including bundled products related to Takaful and standalone investments suchas mutual funds. 5. Future plansSaudi Arabia remains a particularly promising market. It is the largest market in the ArabWorld–and the Group remains as committed as ever to establishing a long, mutually-rewardingpresence there. Group is planning for the IPO of its joint venture Solidarity Saudi TakafulCompany (under formation) and hope to obtain the final operational license from the SaudiArabian Monetary Agency (SAMA) soon thereafter.The Group is also planning to further increase its stake in First Insurance Co., Jordan and toexplore lucrative inorganic growth opportunities in that promising market. MAA TakafulBerhad, the Malaysian associate company of the Group, has firmly established itself as one theleading Takaful players in the Malaysian market, and has performed well over the period;where significant growth in overall revenue and profitability are also expected in future.The Group also looks forward to unlocking the great potential in the Egyptian market throughits fully owned subsidiary. A full review of the financial investments portfolio of the Group willbe carried out to streamline this portfolio and optimize its risk/reward profile.Looking ahead, the Group can now confidently consolidate its earlier growth and continue toexplore potentially unique expansion opportunities. The operations in Bahrain are geared forhigher levels of growth, stronger market visibility and presence and a solid positioning as acomprehensive provider of Takaful insurance solutions.Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 8
  9. 9. Islamic Banking & Finance 6. Customer/Public/shareholders/regulators view about the Solidarity GroupThe Solidarity Group considered as a Shari’a Complaint Takaful group. The performance of theSolidarity Group and its brand equity, strengths and capabilities as a leading Takaful operatorhas been duly recognized by its peers and clients. Solidarity was the recipient of the 2010 GulfInsurance Award, hosted by Gulf Insurance Review Magazine. The award is a testimony to theefforts of the company in enhancing its brand image in offering value added Shari’a’ compliantTakaful services and in reinforcing a strong commitment to their customers.Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 9
  10. 10. Islamic Banking & Finance 7. Bibliography Google www.solidarityShaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 10