Amana Takaful launches Sri Lanka’s first Sharia’h compliant Unit Linked Insurance Plan

Amana Takaful, the pioneer of the Takaful way of insurance yesterday announced the launch of Sri Lanka’s first Sharia’h compliant Unit Linked Insurance Plan.

The product, branded ‘Amana Takaful Prosper,’ is the first of its kind, where the customer will be able to obtain a Takaful (insurance) cover as well as enjoy a choice of Sharia’h compliant investment options.

“We felt the time was right for us to make available this option for all Sri Lankans as part of our expansion plans of product offerings in the backdrop of a peaceful environment and apt economic conditions.

The appetite for investment by the public and private entities has increased, bolstered by a bullish performance of capital markets. On the other hand, developments in the Islamic banking sphere and the expected changes conducive to Islamic finance will augur well for such a product. All these developments have been combined in this offering that caters to the needs of all Sri Lankans,” Amana Takaful Life General Manager and Chief Executive Officer Reyaz Jeffrey said.

“Prosper offers three unique funds, namely the Safe fund and the Volatile fund, which consist of varying degrees of investments in Mudarabah deposits and White Listed equity and a Growth fund, which a has a balanced mix of the two, enabling policy holders to make investment choices based on individual risk appetites, all the while offering a Life and Accident Takaful cover,” Jeffrey said, adding that it was always prudent to have a spread of financial solutions to build and protect one’s financial and personal needs.  

“Prosper is structured in a highly transparent manner so that charges and fees are visible to its participants and the policy holder is able to monitor the performance of his funds via the unit price that will be published daily. In keeping with the Takaful principle, we have also ensured that the entry charges are kept low, so that policy holders would derive maximum benefit,” Jeffrey said.

A Unit Linked Insurance Plan is a special Life product that gives more emphasis for investment and enables a policy holder to plan for his retirement, education of a child or any other financial requirement that one foresees. Based on one’s financial capacity, he or she can choose to make a single investment or make regular payments in order to build his required fund all the while enjoying the benefits of a Takaful (insurance) cover. Additionally, the policy holder makes the choice on the investment of funds and can switch between funds to benefit from market performance.

Where required, besides switching funds, clients can choose to make part withdrawals after three years to facilitate any interim financial requirements.

All Equity investments are in accordance to the White List screening criteria, which is now gaining popularity. Amana Global, a subsidiary of Amana Takaful, recently made public the White List and its basis, in a move to make the White List more transparent and allow all Sri Lankans to benefit from it.

“What is special in this policy is the expertise that has been brought together to offer the best protection, advice and solutions to the customers. We have NDB Aviva Wealth Management acting as the fund manager and Deutsche Bank as its custodian and administrator. NDB Aviva Wealth Management is Sri Lanka’s largest private sector fund manager having over Rs. 45 billion under its portfolio and Deutsche Bank, which has won many global and Asian awards for custodianship and cash management services amongst many others. This expertise, combined with Amana Takaful’s expertise in Takaful, is a unique and strong combination that will mark a milestone in Sri Lankan financial markets history,” Amana Takaful Plc Director/CEO Ehsan Zaheed said.

Amana Takaful is the pioneer of the Takaful way of insurance and has carved itself a strong market over a decade of operations in Sri Lanka. With plans to establish a regional footprint for Takaful in South Asia, the group recently established Amana Takaful Maldives, a fully-fledged licensed operation in the Maldives. Recently, the Maldivian company also sought a listing on the Maldivian Stock Exchange making history in the country. It will make its Initial Public Offering (IPO) in June.

Takaful Plans (Life Takaful Policies) facilitate risk sharing amongst a pool of participants as against the conventional norm of risk transfer. The manager of the plan, in this instance Amana Takaful, is only a manager of the funds and is entitled to a fixed fee for the service, making it more equitable and transparent.

According to Moody’s Investors Service of the US, from US$ 5.3 billion in 2008 as mentioned in the Ernst & Young World Takaful Report of 2010, globally Takaful is growing fast and is estimated to reach a staggering US$ 7.4 billion by 2015. World over there are approximately 80 Takaful operators with an additional 200 Takaful windows. Furthermore, according to Bank Negara of Malaysia, the global Takaful growth rate stands at 20 per cent.