The document summarizes the success and opportunities for growth in the takaful (Islamic insurance) industry. Some key points: - The takaful industry has grown significantly in recent years but still only accounts for 0.7% of the global insurance market, leaving room for further expansion. - Malaysia and Indonesia have been leaders in takaful but initiatives like the Malaysia International Islamic Financial Centre aim to further develop the domestic market and attract more foreign participation. - While the industry has seen success, there are still opportunities to increase public awareness, develop innovative products, and address issues like the lack of standardized shariah interpretations and limited re-takaful capacity. - The global takaful market

1. June 16, 2008 Takaful Successful Islamic insurance operations in the 21 st century Ahmad Feizal Sulaiman Khan Head, Business Development, Etiqa - ICBU [email_address]

2. Takaful % share of insurance market 0.7

3. Insurance: Annual GWP ($trn) 1.6

4. Agenda Success!? of Takaful Initiatives such as MIFC Food for thought Conclusion eTiQa

5. Success!? Of Takaful

6. Success!? of Takaful Total of 139 takaful operators including windows (Source: Best Re & Survey on Takaful and Retakaful Development by Malaysia-IDB) Expected to grow between 15% - 20% p.a. to reach USD7.4 bn annual premiums by 2015 (Source: 2005 Global Takaful Review, Islamic Finance News) Greater participation of conventional markets e.g. UK, premium growth est. : from USD6 million in 2000 to USD260 million by year 2015 (source: Prospects for Evolution of Takaful in the 21st Century by Omar Fisher and Dawood Y. Taylor, presented at 5th Harvard University Forum on Islamic Finance) Additional new licences granted in the Middle East and Indonesia Malaysia and Indonesia at the forefront of Takaful business (USD 1.4 billion in premiums) Source: Takaful Industry, Global Profile & Islamic Finance Review

7. Takaful Operators Worldwide Success!? of Takaful

8. Penetration Rate: Not enough focus on customer convenience and easily explainable products Wider availability necessary for Takaful products New markets, not only Muslims but also non-Muslims Brand awareness & Global recognition – Cross border activities still minimal – must transpire into guidelines for ease of ‘passporting’ – Takaful as a brand as well as the underlying companies not recognized Public awareness is low: Adequate training to agents / dist. Channels and education Incentive modes – to be creative – akin to Wakalah model Banca development - Takaful products need to become bankable (easy access) Competitive pricing Innovative product development – infant stage compared to structured / tailor made wealth mgt/protection solution – one stop centre – to include Islamic trust, will-writing and investment services Growing pains Success!? of Takaful

9. Few re-Takaful operators currently in operation Around 13 re-Takaful companies operating worldwide Only 1 rated re-Takaful operator Highest capitalization of re-Takaful operator USD125m Most retakaful operators are newly established compared with professional re-insurers, therefore perceived to have less value proposition by ceding Takaful companies Strong security rating High capitalization Proven track record of technical expertise But how much re-Takaful capacity do we need? Currently there are no known credible database collating statistics on size of global Takaful and re-Takaful market Conclusion : Growth in Takaful industry is still desired to fill in gap, creating sizeable demand for re-Takaful Growing pains RE-TAKAFUL Operators Success!? of Takaful

10. Art of wealth Entrepreneurial ambition Capital growth Income/Capital preservation Capital protection One Stop Centre - Holistic Service Offering Art of wealth Realising one’s interests in society, culture, leisure or the arts. Entrepreneurial ambition Development/expansion of entrepreneurial activities & talents . Growth Structures allowing a LT increase in wealth. Income, capital preservation Preserving standards of living & continued cash flows. Capital protection Building, protecting & transferring wealth Success!? of Takaful

11. The Global Takaful Market Success!? of Takaful Large Minorities in China, India. Growing Middle Class in Europe & North America. May be more Observant than Muslims in Predominantly Muslim Countries. Takaful may need to be repositioned to emphasize its Universal Values: Ethical. Mutual Sharing & Ownership. Transparent. Build on the success of Islamic Banking. *Ref: A snapshot of the current economic state of Muslim Countries- Hamid, 2006 Muslim Minorities Non- Muslims GDP of USD 1.5 Trillion (4% of World GDP)* State support for Islamic Financial Solutions. Disparate levels of Economic Development. Muslims in Predominantly Muslim Countries

12. Europe Potential?? - European Muslims More than 50 million Muslims in Europe 14 million in the European Union Numbers have tripled in the last 30 years Most demographers forecast similar or higher future growth Islam is the fastest growing religion In Europe Strong culture of insurance especially in the UK, France and Netherlands Success!? of Takaful

13. Initiatives such as MIFC

14. Malaysia International Islamic Financial Centre To create a vibrant, innovative and competitive international Islamic financial services industry in Malaysia, supported by high calibre human talents, world-class infrastructure and best international standards. This initiative has been made a national agenda by the Prime Minister to strengthen Malaysia’s position as an Islamic financial hub. Objectives are: Rapid development of the domestic Islamic financial system Liberalisation of Islamic banking and Takaful market through increase in foreign participation with the presence of international institutions, eg. ICBU model Global integration of the Islamic financial system with active involvement A wide variety of financial products and a vibrant financial market, growing pool of talents and resources Effective role in promoting Takaful internationally especially among Islamic Development Bank member countries. MIFC

15. Onshore Offshore Int’l JV Int’l Currency Business Unit (ICBU) - Banca - 3 rd party banca Onshore focused Suitable business partners Underwriting Base Capital required Regulated offshore environment G to G recognition goes a long way Central booking To export and import creativity and product innovativeness Distributor Focus under MIFC International Takaful Operator (ITO) MIFC

16. International Currency Business Unit An ICBU can be set up under an Islamic bank or a Takaful operator Takaful ICBU: Non-Ringgit composite Takaful and Re-Takaful business Focus on Non-residents International currencies other than Malaysian Ringgit Window of opportunity to deal with residents Tax advantages in promoting ICBU model MIFC

17. The Malaysian Takaful Journey Special Task Force 1982 Takaful Act 1984 1984 Syarikat Takaful 1983 Bank Islam 1993 Takaful Nasional 2001 Mayban Takaful 2003 Takaful Ikhlas Commerce Takaful 2005 2006 4 New licences MIFC

18. Takaful Growth in Malaysia Takaful is expected to constitute some 20% of the total insurance market in Malaysia by 2010 (US$1.85 billion) MIFC

19. Food for thought

20. Move Takaful out of infancy stage Open markets Forward looking instead of backward looking Driven by co-operative nature of the business Brand and content recognition – young industry Necessary to develop a (inter)-national plan Ambitions/opportunities!? Food for thought

21. How will Takaful Opportunities be realised? Open Markets Open markets agreement (similar to open skies agreement) Liberalization of Islamic markets Harmonize Shariah interpretation with the objective to: Grow the combined Takaful market together Allow and stimulate reciprocal business between Islamic countries Redefine regulatory environment Positive discrimination such as Tax incentives Additional benefits Forward looking instead of backward looking Act as one , eg , MTA in Msia, or GTG globally Growth opportunities Number of interested parties is growing (Muslims & Institutions) Focus still on non-life Food for thought Food for thought

22. How will Takaful Opportunities be realised? Driven by co-operative nature of business Concept of Takaful is genuine and appealing to the masses More even and fair compared to traditional insurance Brand and content recognition Takaful brands are still relatively young Islamic and Takaful could have the wrong connotation Viability of Takaful operators could be questioned Many potentially interested parties are illiterate with regards to Takaful National and international plan (through f.i. “Organisation of Islamic Conference” (OIC) and “The Islamic Financial Services Board” (IFSB) and the “Islamic Development Bank” (IDB) Food for thought Food for thought

23. Conclusion

24. Est.1.7bln Muslims globally + Muslims seeking out halal products + Dedicated Global Takaful players + Utilising world class insurance skills = Successful Global Takaful With technology - Launch products in a month’s time... Conclusion = Success Formula

25. eTiQa

26. Old and new structure Mayban Fortis Sdn Bhd Mayban Fortis Sdn Bhd MLA MGA TN MNI MTB eTiQa Takaful eTiQa Insurance Old New Former MTB and TN Former MLA, MGA and MNI Fortis Insurance Maybank Fortis Insurance Maybank 70% 30% 30% 70% eTiQa

27. VALUES Crystal clear “We like to keep things clear” Hand in hand “With diversity we create opportunity” Performance with conscience “There is care in what we do” Rock solid “We have a firm foundation to build on” OBJECTIVES Ethical approach: Transparency necessary Harmonization necessary Incentives necessary Global approach Partnership between Maybank and Fortis – East meets West Technical collaboration – Takaful experts combines with Banca / investment experts Humanization Value adding – benefits must be clear and upfront Localised towards the various regions eTiQa

28. Thank you!