Takaful is an Islamic insurance concept which is grounded in muamalat, or Islamic banking, and observes the rules and regulations of Islamic law. According to the takaful system, the company will distribute its profits to customers.
Neova Sigorta will be able to implement the takaful system once it begins to make a profit in three to four years. (source)
The takaful insurance system may be adapted to all the non-compulsory insurance products, according to Özgür B. Koç, chief executive officer of Neova Sigorta. “We can call this type of insurance interest-free insurance. In Turkey, there is only one regulation in the insurance sector. We do not have a special regulation for takaful-styled insurance. We will consider some of the principals implemented abroad,” Koç said.
The takaful insurance system has two principals, according to Koç. “Financial gain is obtained by interest-free instruments, just like participation banking, and operational profits are paid back to customers,” Koç said.
Turkapital, an investment holding company established by Kuwait Finance House Group, holds 53 percent of Neova shares. Kuveyt Türk also owns 7 percent of Neova.
“We aim to make Neova one of the key brands of the sector within five years,” Koç said, adding that they hoped to begin operations in the Turkic republics in the future.
“Our main partner, Kuwait Finance House, has businesses in Azerbaijan and Tatarstan. Kuveyt Türk is also establishing a bank in Kazakhstan. Our group will invest in the Turkic republics. Neova wants to open up to Central Asia.”
Neova Sigorta has been operating in the non-life insurance sector since December, 2009, and produced a 62,000 Turkish Lira premium last year. Automobile and traffic insurance constitute 83 percent of the total premium produced, Koç said.
“Neova is aiming to produce 90 million liras worth of premiums this year,” Koç said, adding that the share of automobile and traffic insurance is expected to decrease to 63 percent.
2010 was hard for the sector
2010 was quite difficult for the insurance sector, Koç said. “The Turkish banking sector obtained historic profits and the automotive sector took its highest sales figures. The residential sector passed the best year in its last three years and Turkish industry increased its over capacity significantly.”
“Despite all these good evaluations, the insurance sector was not able to obtain the results ti expected,” Koç said.
There are various reasons for this situation, Koç said, adding that the insurance sector could not make a profit in 2010, even though it grew more than the inflation rate. “According to data from November last year, the sector showed 5 percent real growth. But losses increased,” Koç said.
The company sells its products via 300 insurance agents and the branches of two lenders, Kuveyt Türk and Albaraka. “We aim to increase the number of agents to 400,” he said.
Source : http://www.hurriyetdailynews.com/n.php?n=neova-implements-islamic-insurance-system--in-turkey-2011-01-28 - Jan 28, 2011
