Amãna Takaful Group records growth of 22% in 2015

Amãna Takaful PLC (ATPLC) recorded sound growth in 2015 and strengthened its position as the leading fully-fledged Takaful service provider in Sri Lanka. The Group reported a consolidated revenue of Rs. 3.24 billion, an increase of 22.2% over 2014 whilst sustaining good underwriting results. The Group includes Amãna Takaful PLC, Amãna Takaful Life Ltd., Amãna Takaful Maldives PLC, and Amãna Global Ltd. 

At the company level ATPLC reported profits for 2015 of Rs. 265.3 million coming from a one-off transfer of an investment from its fully owned subsidiary Amãna Global Ltd. ATPLC also grew its composite Gross Written Premium (GWP) to Rs. 2.48 billion. This includes a revenue of Rs. 928.3 million from the Life business, reflecting a growth of 20.5% ahead of the industry’s 17.4%. The company defended its market share at 2%. The forerunner in this growth is Amãna Takaful Life, which recorded a significant upside of 36.7%, over-performing the Life industry’s year on year growth of 20%.

Meanwhile, the company embarked on a three-year Strategic Plan for the period 2015-2017, the first of which has just concluded, according to which the segregated Life business as a wholly-owned subsidiary of Amãna Takaful PLC (ATPLC), achieving a seamless transformation under the name and style of Amãna Takaful Life Ltd.

“Though the Industry’s General business growth moved up from 3.9% in 2014 to 15.4% in 2015, 77% of that premium volume upside was a result of motor underwriting, that too in a fierce price-cutting environment. This resulted in the General Insurance Industry GWP largely being pummelled by motor claims for the second successive year. With a record number of new motor registrations and resultant congestion and mishaps, compounded by rate cutting, the loss ratios were substantially higher, with ATPLC being no exception. While the market has recognised the negative consequences of rate-cutting as a competitive strategy, a correction in pricing is clearly an imperative to service cost of claims and spares. The soaring incidents of road accidents and high cost of claims service and spares, resulted in the loss ratio in Motor increasing substantially with significant impact on overall performance,” highlighted Amãna Takaful PLC Chairman Tyeab Akbarally. “Exacerbating the situation is the un-wieldy credit levels in the industry, where Sri Lanka stands unique in the region. In this context, we can continue to bemoan the low industry indices and penetration levels, even as the economy takes off, not adding real value to GDP. As we embark on the Risk-Based Capital regime from 2016, the challenges it presents will bring added pressure on business performance,” added Akbarally.

Despite the battle to muster motor business in the industry Amãna Takaful PLC was able to bring balance to the overwhelming pressure on GWP reporting a portfolio mix of 66:34 motor/non-motor ratio.   

“One half of our business growth was realised from the non-motor segment in which we made good progress in all its sub-classes, with favourable underwriting results. We will continue to accelerate this trend to re-balance our portfolio for sustainable business results,” said Amana Takaful PLC Chief Executive Officer Fazal Ghaffoor.  “Our continuous pursuit to influence and enlist potential customers, develop products for Banca-takaful partners thereby expanding the concept of Takaful throughout the Island has paid-off with an improved volume share from our branch network now counting 54% of total GWP,” he continued.  ATPLC during its 16-year journey has been successful in pioneering and establishing the Takaful concept in Sri Lanka. Amãna Takaful is one of the few ISO certified insurance operators in Sri Lanka and operates 27 branches across the island. The company serves all communities and employs a multi-ethnic team as part of its ongoing commitment to remain ‘open to all’. ATPLC continuously reaches out to customers from all segments of society and offers innovative and state-of-the-art insurance solutions that are convenient, affordable and hassle-free. 

Amãna Takaful Maldives, a subsidiary of ATPLC continued to defend its market share and deliver year on year profits for the fifth consecutive year, since being a listed entity on the Maldives Stock Exchange. However, the profit momentum was severely impaired by a ruling of the authorities to consolidate a significant segment of volume and revenue in one class of business to be underwritten only by the State insurer. Despite the profit out-turn of Rs. 48 m (lower by 40% over 2014) Amãna Takaful Maldives is steadfast to share surplus with its customers for the fourth successive year.

The current Board of Amana Takaful PLC includes Tyeab Akbarally (Chairman), Ehsan Zaheed (Executive Director), Non-Executive Directors Osman Kassim, Dr. A.A.M. Haroon, Dr. Ifthikarudeen Ismail and Non-Executive Independent Directors M.H.M. Rafiq, Dato’ Fadzli Yusof, A.S.M. Muzzamil, R. Gopinath and recently appointed Non-Executive Directors, M.H.S. Kassim and M.R.M. Nayeem.

The Directors of the newly incorporated Life Company, Amana Takaful Life Limited are Tyeab Akbarally (Chairman), Fazal Ghaffoor (Executive Director), Non-Executive Directors Dr.  Ifthikarudeen Ismail, Non-Executive Independent Directors M.H.M. Rafiq, Dato’ Fadzli Yusof, R. Gopinath and recently appointed Non-Executive Director A.S. Kassim