Takaful or Islamic Insurance pays off

As reported in Business Times Malaysia Wednesday, HSBC Amanah Takaful (Malaysia) Sdn Bhd, the Islamic insurance arm of HSBC Bank Malaysia Bhd, saw its regular premium collections double in the last six months, after shifting to traditional insurance products from single premium investment-linked plans. Chief executive officer Zainuddin Ishak said the move had allowed the takaful operator to collect RM30 million in regular premiums in a six-month period compared with RM15 million in the preceding six months.

This news comes on the heels of the recent announcement about the imminent relocation of Mukhtar Hussain, the global head of HSBC Amanah, the Islamic banking division of the HSBC Group, to Kuala Lumpur, the Malaysian capital, raising the question whether the Malaysian capital is set to become the headquarters for HSBC’s Islamic finance business? Hussain has hitherto been located in Dubai, the traditional global headquarters of HSBC Amanah.

Hussain will be the CEO of HSBC Malaysia Berhad in addition to being the global head of HSBC Amanah Bank and the chairman of HSBC Amanah Malaysia.

This is a recognition by the HSBC Group that the Malaysia International Islamic Financial Centre (MIFC) is one of the major hubs for Islamic finance and that Malaysia is an important promoter of islamic finance.


The principles of takaful, or Islamic insurance are:

1)Policyholders cooperate among themselves for their common good.
2)Every policyholder pays his subscription to help those that need assistance.
3)Losses are divided and liabilities spread according to the community pooling system.
4)Uncertainty is eliminated in respect of subscription and compensation.
5)It does not derive advantage at the cost of others.