Islamic insurance merger creates UAE giant

Al Hilal Bank CEO Alex Coelho said the lender would focus on its core business following the sale of its Islamic insurance unit. (Photo courtesy of Al Hilal)
Updated 20 December 2017
0

Islamic insurance merger creates UAE giant

LONDON: Takaful Emarat has agreed to acquire Al Hilal Takaful from Al Hilal Bank in an all-cash transaction that will create the largest Islamic insurer in the UAE, based on 2016 gross written contributions.
The move is viewed as part of a consolidation drive in the Gulf’s takaful sector and the wider regional insurance market as local players look at mergers and acquisitions to offset weak profitability.
A recent report by E&Y said performance had been knocked by low interest rates, a stagnant real estate market and, until recently, insufficient regulatory oversight.
A statement said Takaful Emarat provides life and health takaful insurance for customers, mostly in Dubai and the Northern Emirates.
Al Hilal Takaful operates with a general license, offering a wide range of cover for individual and corporate customers, primarily in the emirate of Abu Dhabi.
The deal will enable the combined group to offer comprehensive takaful products and services throughout the UAE, giving consumers greater choice.
The two companies wrote more than Dh900 million ($245 million) in combined gross written contributions in 2016, said the announcement.
Mohammad Al-Hawari, managing director of Takaful Emarat, said Tuesday’s deal would drive growth through a wider range of takaful services and a larger customer base.
“In parallel, we are making strong progress in developing our digital platform, which will mean a highly efficient and cost-effective service for our customers.” Alex Coelho, CEO of Al Hilal Bank, said: “We are working closely together to ensure a smooth transition for all our insurance customers.”
Takaful Emarat’s planned acquisition of Al Hilal Takaful is subject to full regulatory approvals and is scheduled to be completed in the first quarter of 2018.
The transfer of Al Hilal Takaful’s ownership to Takaful Emarat will have no impact on current takaful policies, contracts, claims settlements or the writing of new insurance business.
E&Y’s industry report pointed out that increasingly competitive markets with price and margin pressures had seen some insurers cutting costs to maintain their bottom line.
“Despite these efforts, short-term financial results in some markets are impacted by regulatory change and the need for better reserving — leading some local insurers to actively look at consolidation.” Regulatory tightening is ongoing.
In an unprecedented move in November 2016, SAMA suspended a number of significant KSA motor insurers from issuing new motor policies until customer complaints and claims management issues were addressed by the insurers.
The E&Y report predicted that regulators and insurers would exhibit increased agility in addressing emerging opportunities such as digital and the challenge of lower oil prices.
“Regulatory changes, including the introduction of VAT/IFRS and higher customer expectations, will be key drivers of change and an opportunity for insurers to revamp their operating models,” said E&Y.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
0

Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.