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The Role of International Insurance Companies in the opening of frontiers: development of new products (Takaful). Sohail Jaffer Partner, FWU Group. FWU group won the Euromoney Islamic Finance Award for being the "Best Islamic white label service provider“. Contents.

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The Role of International Insurance Companies in the opening of frontiers: development of new products(Takaful)

Sohail Jaffer

Partner, FWU Group

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


Contents
Contents

  • 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


Fwu s definition of bancassurance
FWU’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.»

Customer

Demand Driven


FWU-GROUP‘s Core Business Competencies

Bancassurance - Asset Management - Factoring

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

Germany Luxembourg Austria Italy France Saudi Arabia United Arab Emirates Pakistan Malaysia

Kuwait


Fwu group s international business model
FWU Group’s International Business Model

  • Strategic Product

    Partners

  • Clone international Bancassurance success

FWU Shari’ah Board & Expertise

  • Structured asset management approach

  • Product & process innovation

  • Web-based POS & Admin System

  • customer convenience

  • tailored ‘white label’ solutions

  • quality training and sales support

  • commission factoring solution

  • exclusive Retakaful solution

  • selection of service providers incl. custodian bank


Benefits of white label bancassurance solution
Benefits of ‘White label’ Bancassurance Solution

  • Bank defines own commission level

  • Tailored customer solutions

Bank offers choice of both conventional Bancassurance and Takaful products

  • Structured asset mgt. approach linked to open inv. architecture

  • Seamless integration into Bank’s own brand

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


Contents1
Contents

  • 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


Fwu group s international bank distribution and strategic product partners
FWU Group‘s international Bank distribution and Strategic product partners

Bank Distribution Partners

  • FWU's existing distribution partners include: NCB in KSA and ADCB in UAE

Al Safat Takaful

Company

Kuwait

Bank Customers

Aman Insurance

UAE

EFU Life Insurance

Pakistan

Al Ahli Takaful

Company

KSA

Takaful Ikhlas

Malaysia

Bank is Custodian of all customer

funds in the Savings Plan

  • 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

Local Life

Insurance Product Partner

FWU Int. Network

Dubai, KL

& Luxembourg


Contents2
Contents product partners

  • 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


Main product features and customer benefits
Main product features and customer benefits product partners

FWU Group‘s "White Label" Savings, Education and Retirement Plans –

Product Highlights

Product features

Customer Benefits

  • Plan benefits are available to all bank customers

  • All bank customers are insurable

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

  • Eliminates important psychological barrier

  • Transparent and cost efficient structure

  • Greater customer comfort

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

  • Immediate risk cover for bank customer

  • Plan benefits are available immediately to all bank customers

  • Bank customer convenience


Bank Income Growth – 5 year period product partners

7,000

6,000

5,000

USD ('000)

4,000

Conservative

3,000

Average

Best

2,000

1,000

-

Year 1

Year 2

Year 3

Year 4

Year 5

Bank Annuity Income: Attractive Dynamics

Conservative Average Best

Base Assumptions:

Number of Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 40,000 50,000

Average duration 15 years

Average monthly contribution $ 200

Lapsation rate 2 to 10 % p.a

Fund growth rate 7 % p.a



Contents3
Contents product partners

  • 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


Structured asset management approach
Structured Asset Management Approach product partners

  • Agreed funds target universe

  • Objective Investment process

FWU’s fund selection and allocation model

  • Overweights the winners & underweights the losers

  • Enhance return by 15% to 25% p.a


FWU‘s Dynamic Fund Selection product partnersand Allocation Model

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 product partnersand Allocation Model

Allocation model (key value added)

  • Overweighting of the outperformer

  • Underweighting of the underperformer


Investment Proposal for Regular and Single Premium Savings Plans

FWU‘s Dynamic Fund Select & Allocation Model

Strategy 1ConservativePortfolio

Strategy 2BalancedPortfolio

Strategy 3GrowthPortfolio

Strategy 4DynamicPortfolio

Investment in External Islamic Mutual Funds

Launched as internal funds ofFWU‘s local Takaful Product Partner


Investment Advantages of Pooling Plans

Conservative

portfolio

Balanced

portfolio

Growth

portfolio

Dynamic

portfolio

25:75

50:50

80:20

0-100

Cash

Equivalent

Pool

Equity Pool

Custodian

Bank

  • Direct Investment in:

  • Sukuk

  • Murabaha

  • Trade-Finance


Contents4
Contents Plans

  • 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


The value added why fwu group
The value added – why FWU Group Plans

INNOVATION

ENTREPRENEURIAL

PARTNER

  • Sophisticated Point of Sale and Administration System

  • Customised product design

  • Product training and sales support

  • Dynamic funds select and allocation model

  • Business simulation model

  • Cost efficient Agency structure

  • Regional service hubs

  • Unique Retakaful arrangement


Contents5
Contents Plans

  • 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


Fwu group s exclusive retakaful pooling arrangement
FWU-Group‘s Exclusive Retakaful Pooling Arrangement Plans

Hannover Re

(„AAA rated“,

3rd largest

life Reinsurance)

FWU–GROUP

Pooling

Arrangement

Wakeel/Trustee

Administrator

  • Data processing

  • and administration Asset Management

  • Fee Basis

  • 100% profit redistribution

  • Quard Hasna

  • Shari‘ah compliant Investments

Establishment of insurance provider through joint venture or strategic cooperation agreement

InsurancePartners

Al Ahli TakafulCompany

NCB/FWU / IFC

Dubai Islamic Insurance & Reinsurance

AMAN

Eastern

Federal

Union Life

EFU

Takaful Ikhlas SDN BHD

Al Safat Takaful

Company

Bank distribution partners in the following markets

Malaysia

UAE

Kuwait

Pakistan

KSA

Distribution-Partners

The National Commercial Bank

Jeddah

Abu Dhabi CommercialBank

Major Bank

Major Bank

Major Bank


Contents6
Contents Plans

  • 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


FWU-GRUPPE Plans

An entrepreneurial and institutional partnership

Dr. Manfred J. Dirrheimer andPartners

Swiss Re FrankonaRückvers. AG,Munich

95%

5%

FWU AG

Munich, Luxembourg, Dubai, Kuala Lumpur

74,9%

100%

13,25%

80%

10%

100%

Wave Asset Management AGHamburg

PREMIUM SELECT LUX S.A.Luxembourg

FWU Payment Services GmbH Munich

Branch Luxemburg

International HQ

Al Ahli Takaful Company Jeddah, KSA

ATLANTICLUX Life Insurances S.A.Luxembourg

FWU Commission Factoring GmbHMunich

7,5%

Branch Dubai

Regional HQ ME

13,25%

25,1%

30%

90%

25,1%

Branch

Bolzano

VHVVersicherungen,Hanover

IFC International Finance CooperationWashington

National Commercial Bank, Jeddah, KSA

VHVVersicherungen,Hanover

Branch Kuala Lumpur

Regional HQ FE


Fwu group profile
FWU Group – Profile Plans

  • 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.


Contact
Contact Plans

Mr. Sohail Jaffer

Partner, FWU Group

2, Rue Sainte Zithe

L-2763 Luxembourg

Email: [email protected]

Tel: +352 – 2 61 97 700

Fax: +352 – 2 61 97 800

Internet: www.fwugroup.com

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.


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