HANNOVER, Germany, Dec. 8, 2006 (PRIME NEWSWIRE) -- Hannover Re has established Hannover ReTakaful B.S.C.(c) in Manama, Bahrain, a wholly-owned subsidiary for the underwriting of worldwide reinsurance in conformity with Islamic law (so-called retakaful business). The company had already received an appropriate licence in September from the Central Bank of Bahrain (CBB) - formerly the Bahrain Monetary Agency.
Hannover Re is thus the first of the major western reinsurance groups to serve this emerging market with its own exclusively dedicated subsidiary. "Bearing in mind that a quarter of the world's population are adherents to the Islamic faith, 70% thereof are under the age of 35 and the global Islamic insurance market is scarcely developed as yet, we see extremely attractive growth prospects and scope for innovative product design in this area," noted Hannover Re's Chief Executive Officer, Wilhelm Zeller.
Leading managers of the CBB welcomed the establishment of Hannover ReTakaful: "We are sure that the participation of Hannover Re will make a positive contribution to the development of the financial sector of the Kingdom of Bahrain and the region," explained Rasheed Mohammed Al Maraj, governor at the CBB.
As things currently stand, only a few Sharia-compliant reinsurers with relatively modest underwriting capacity offer professional protection to the more than 80 takaful insurers active in 20 countries. "We expect 2006 will already see a doubling of the premium volume for worldwide retakaful business compared to 2004," Mr. Zeller emphasised.
'Takaful' is an Arabic term meaning 'guaranteeing each other'. In the (re)insurance industry it is used to designate a business model that resembles the form of a mutual insurance company and makes appropriate allowance, inter alia, for the prohibition of interest income in the Islam.
Takaful insurers are obliged to obtain reinsurance from a Sharia-compliant retakaful company and may only resort to traditional reinsurance if sufficient retakaful capacity is lacking. This opens up a unique potential for Hannover ReTakaful.
Hannover Re has appointed Mahomed Akoob as CEO to head the new company. Until recently he served as CFO of Hannover Re's subsidiary in South Africa. Having worked in the industry for many years, Mr. Akoob has extensive experience in reinsurance business.
Hannover ReTakaful will write its business across all lines worldwide. The company's Sharia Supervisory Board, which will regularly review the overall compliance of the company with the principles of the Sharia, includes renowned figures such as Dr. Mohammed Ali Elgari and Hafiz Abdul Nabi Hamidi.
The new company has started business operations - in good time for the renewal season - this week. It has an authorised share capital of BHD 50 million (roughly USD 135 million).
Hannover Re, with a gross premium of approximately EUR 10 billion, is one of the leading reinsurance groups in the world. It transacts all lines of property/casualty, life/health and financial reinsurance as well as specialty insurance. It maintains business relations with more than 5,000 insurance companies in about 150 countries. Its worldwide network consists of more than 100 subsidiaries, branch and representative offices in around 20 countries with a total staff of roughly 2,000. The rating agencies most relevant to the insurance industry have awarded Hannover Re very strong insurer financial strength ratings (Standard & Poor's AA- "Very Strong" and A.M. Best A "Excellent").
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