Absa Buys Islamic Insurance Group Takafol South Africa
September 12 - The only solely Islamic insurance group in the country,
Takafol South Africa, has been acquired by the Absa Group, it was revealed this
week. What was not publicised was the acquisition sum.
Takafol's acquisition was confirmed by the bank just before the weekend.
Although Islamic insurance takes up only one percent of the total global
market, it is growing in numbers in places such as Malaysia and Indonesia, with
more and more Muslims showing an interest in taking out insurance products that
are compliant with their religion.
Ernst and Young said that global contributions to Islamic insurance products
will reach around $12 billion by the end of this year - an increase from $9.15
billion last year.
According to Business Day, South Africa's Islamic insurance market generates
approximately R3 billion a year.
Takafol South Africa was founded in 2008, when AIC began underwriting its
South African business, and since then the group's SA personal lines and
commercial business have grown by over 66%.
Absa to grow Islamic insurance market
The South African executive of Takafol South Africa, Uwaiz
Jassat, who will head the new
unit, said that Absa hopes to expand into this niche market in other countries
across the African continent once it successfully incorporates the new group
under its umbrella of brands.
The Managing Director of Absa Insurance, Edwyn O'Neill, said:
"This deal demonstrates Absa's commitment to provide the Islamic community with
a holistic financial services offering that is Shari'ah compliant. Today, we
cement our relationship with the Islamic community and recognise that there is a
need for similar products in the rest of Africa."
Jassat added: "The global Takafol and Re-Takafol industry is
experiencing significant growth. The principles of mutual or joint guarantee are
the foundations of Takafol and play a significant role in the economic and
social development of societies."
The MD of Absa Islamic Banking, Amman Muhammad said that the
acquisition provides the company with an opportunity to significantly grow in
South Africa and the rest of the continent. He said that Absa Takafol would see
Absa expand its service offering beyond banking and provide customers with "an
unparalleled Islamic value proposition."
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