Allianz will launch its first Islamic annuity product next year, the head of its takaful unit said, tapping into a growing number of clients in the Middle East keen to add to their state pensions. It has long been hard for takaful - or syariah-compliant - insurers to sell such products, because of the lack of long-term Islamic bonds with which to match pension liabilities, Abdul Rahman Tolefat said on Wednesday, reports Reuters (July 3, 2009).
The German insurer's unit had lobbied banks to issue long-term debt and unnamed banks had now issued 25-year to 30-year sukuk, Tolefat said at a conference.
"This is really a promising industry, especially in the GCC (Gulf Cooperation Council) - people are looking for private pensions because state pension are not high enough," he said on the sidelines of the conference, the report added.
Allianz was one of the first Western insurance companies to venture into takaful, in which members contribute to a pool of funds which is used to indemnify participants who suffer a loss, much in the same way as with a mutual insurer.
Allianz Takaful already has a pension product which pays out over a pre-agreed number of years, but annuities that guarantee income until death are still an untapped market.Any source
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