Solidarity report, Kashif Dayo

Islamic Banking & Finance

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Submitted To: Submitted By:
Sir Azeem Pirani Kashif Dayo

MBABF-1156103

Shaheed Zulfikar Ali Bhutto Institute of Science & Technology Page 1


S.No: Topic Page No:

Acknowledgment 1

1. Introduction 2

i. The subsidiaries, associates and joint venture of the Solidarity Group. 3

ii. The Shari’a Supervisory Board 4

2. Area of specialization 4

3. Financial positions 4

4. Product line 5

i. General Takaful 5

ii. Family Takaful 5

iii. Asset Management 6

5. Future plans 6

6. Customer/Public/shareholders/regulators view about the Solidarity 7
Group

7. Bibliography 8



Acknowledgment

All the praise to Almighty Allah the most beneficent and merciful who gave me this opportunity
to compile this term project of Islamic & Banking Finance Course.

I would like to express my gratitude to all the people that were involved both directly and
indirectly in the preparation of this report. I apologize to the people whose names that I have
not mentioned, but their contribution is highly appreciated by me.

I would like to thank my course instructor Azeem Pirani for guiding me and for giving me the
opportunity to initiate this project. More specifically, I would like to thank him for imparting his
time and wisdom.

This IBF report is made with a great deal of my efforts, I worked hard on this project and gave
my best for making this report best one.



1. Introduction
Solidarity Group Holding is committed to becoming the world’s leading international Islamic-
oriented financial-service group in the world. The company plans to offer superior returns,
world-class customer service, avant-grade packages and innovative thinking to its shareholders.

During 2009, the Group had three key areas of activity; General Takaful, Family Takaful, and
Asset Management and Investments. These were supported by centralized Corporate Services
covering Human Resources, Information Technology, Legal and Compliance, Finance and
Corporate Communications. 2009 marked the first full year of operation post the 2008
restructuring of company’s two main subsidiaries, Solidarity General Takaful and Solidarity
Family Takaful. Group’s both entities have witnessed healthy growth and have further
strengthened their positioning in its home market despite the prevailing challenges.

Solidarity Group's authorized capital of $500 million and its paid-up capital of $220 million are
being invested toward further improving its performance and quality of client services. As a
responsible corporate member of the communities it serves, the company values innovation,
integrity, social responsibility, teamwork and partnership as well as transparency as part of its
day-to-day operations.

Solidarity’s vision is to be a leading international Islamic-oriented financial services group
generating superior returns to shareholders. On the regional and international fronts, the
Group continued its strategic positioning and consolidation, especially in the markets of Jordan,
Saudi Arabia, Malaysia and Egypt



i. The subsidiaries, associates and joint venture of the Solidarity Group.

Entity Holding Country of Nature of
incorporation activities
Subsidiaries
1. Solidarity General Takaful BSC (c) 100% Kingdom of Takaful
Bahrain
2. Solidarity Family Takaful BSC (c) 100% Kingdom of Takaful
Bahrain
3. Takaful Islamic Insurance 100% Kingdom of Takaful
Company EC (“TIIC”) Bahrain
4. Islamic Takaful and ReTakaful 100% Bahamas ReTakaful
Company (Bahamas) Ltd (“ITRC”)
5. Solidarity Takaful S.A. 100% Luxembourg Takaful
Luxembourg
6. Solidarity Fund Company (“SFC”) 100% Kingdom of Investment
and related funds: Bahrain Management
Solidarity International Real
Estate Fund
Solidarity Leasing Fund
Solidarity Global Growth
Fund
Solidarity European Real
Estate Fund
7. Solidarity Aman Fund BSC (c) 100% Kingdom of Investment
(“SAF”) Bahrain management
8. Solidarity Asia Takaful Fund 100% Cayman Islands Investment
Management
9. Solidarity Family Takaful Egypt Co 100% Egypt Takaful
Associates
10. Ensurion WLL 25% Kingdom of Insurance
Bahrain management
11. First Insurance Company 26.14% Jordan Takaful
Joint venture
12. MAA Takaful Berhad 25% Malaysia Takaful



ii. The Shari’a Supervisory Board
The Shari’a Supervisory Board reviews all the company’s operations in accordance with the
Balance Sheet of every year. The board reviews and confirms the implementations of the
principles and guidelines governing the relationship between the policyholders and shareholder
in order to identify the right of each side. The Board gives its Shari’a directives for Takaful
transactions and answers the queries made by the management.

The company’s management is responsible for ensuring that the company conducts its business
in accordance with Islamic Shari’a rules and principles. It is The Shari’a Supervisory Board’s
responsibility to insure that all the Takaful transaction is Shari’a Complaint.

2. Area of specialization
Solidarity group is one of the largest Takaful Group of the world. Group basically specialized in
Takaful, and group has been proved to be a successful Takaful company in the world. The
awards are the witnesses of group’s success, i.e. Bahrain Based Solidarity accepts two
Prestigious Awards including Takaful Insurer of the Year for the second consecutive year (2010-
11).

3. Financial positions
The Group showed good turn around despite continued global economic meltdown and an
extremely challenging operational environment. The Group achieved an operational breakeven
point during 2009; however, the creation of conservative and prudent exceptional investment
provisions to the extent of US$7.20 million has resulted in a loss of US$7.24 million for the year
ended 31.12.2009. Most of these provisions relate to re-evaluation of real estate properties
across geographies; given the slow paced yet steady improvement in the world economy, likely
future pick up in values can easily result in the reversal of these provisions to the benefit of the
Group.

The Gross contributions of Family Takaful increased by 11% compared to 2008. The Family
Takaful Business in Bahrain has achieved a sizeable market share in Group Life & Medical
portfolios.

The gross contributions of General Takaful increased by 50% from US$14.00 million in 2008 to
US$20.96 million in 2009. The operations continue to show remarkable growth since
commencement of operations in Bahrain in 2004. The Company has achieved this growth by



acquiring the insurance program of major clients like Gulf Petrochemical Industries Company
(GPIC) as well as through enhanced market penetration using diverse distribution channels.

4. Product line
The Group primarily operated as a Takaful provider and its primary lines of business comprise
general Takaful, family Takaful and asset management and Investments operations. These were
supported by centralized Corporate Services covering Human Resources, Information
Technology, Legal and Compliance, Finance and Corporate Communications.

i. General Takaful

Solidarity General Takaful includes Marine, Non-Marine & Motor Takaful. Solidarity General
Takaful continued to expand its retail distribution through a mix of brokers and financial
institutions. It opened a sales desk at various distributor locations during 2009. The success of
implementing a toll free 24x7 service for assisting its motor insurance customers is very much
appreciated by customers. This service includes road side assistance and in the event of a claim,
car replacement service.

In order to facilitate the renewal of motor policies and registration at Traffic Department,
Solidarity General is one of the few companies that have teamed up with Bahrain Government’s
e-gov.

ii. Family Takaful

Solidarity Family Takaful BSC(c), Bahrain has continued to achieve impressive results during the
year 2009. The gross written contribution for the year amounted to US$16.81 million of which
individual Takaful policies comprised US$ 3.09 million; savings and investments US$2.63 million;
as well as US$11.09 million from group life, credit life and medical policies. Compared to the full
year operations of these classes of business in 2008, this represents a growth of 9% (2008
US$15.43 million).

The company provides Family Takaful protection and savings plans, Group Life Takaful and
Medical Takaful covers. With this increased market presence, SFT has established itself as a full
fledged family Takaful and medical Takaful provider in the Kingdom. SFT has expanded its
distribution channels and modified some product features in order to become more
competitive.



iii. Asset Management

Solidarity’s Shari’a-compliant portfolio of investments, which covers proprietary investment
funds regulated by the CBB, external funds and strategic investments, performed well during
the year, with no impairment. As a result, the Company’s Asset Management activities
continued to make a sizeable contribution to the Group’s overall income.

The Group’s diversified Fund portfolio, with a well balanced risk profile, comprises mudaraba,
leasing, sukuk, real estate, equities and other Islamic instruments. In addition, the Asset
Management division continued to manage the Company’s liquidity requirements; monitor the
progress of Solidarity’s strategic investments; provide structuring advisory services to support
the Company’s ventures and acquisitions; and develop new investment products for
policyholders, including bundled products related to Takaful and standalone investments such
as mutual funds.

5. Future plans
Saudi Arabia remains a particularly promising market. It is the largest market in the Arab
World–and the Group remains as committed as ever to establishing a long, mutually-rewarding
presence there. Group is planning for the IPO of its joint venture Solidarity Saudi Takaful
Company (under formation) and hope to obtain the final operational license from the Saudi
Arabian Monetary Agency (SAMA) soon thereafter.

The Group is also planning to further increase its stake in First Insurance Co., Jordan and to
explore lucrative inorganic growth opportunities in that promising market. MAA Takaful
Berhad, the Malaysian associate company of the Group, has firmly established itself as one the
leading Takaful players in the Malaysian market, and has performed well over the period;
where significant growth in overall revenue and profitability are also expected in future.

The Group also looks forward to unlocking the great potential in the Egyptian market through
its fully owned subsidiary. A full review of the financial investments portfolio of the Group will
be carried out to streamline this portfolio and optimize its risk/reward profile.

Looking ahead, the Group can now confidently consolidate its earlier growth and continue to
explore potentially unique expansion opportunities. The operations in Bahrain are geared for
higher levels of growth, stronger market visibility and presence and a solid positioning as a
comprehensive provider of Takaful insurance solutions.



6. Customer/Public/shareholders/regulators view about the Solidarity
Group
The Solidarity Group considered as a Shari’a Complaint Takaful group. The performance of the
Solidarity Group and its brand equity, strengths and capabilities as a leading Takaful operator
has been duly recognized by its peers and clients. Solidarity was the recipient of the 2010 Gulf
Insurance Award, hosted by Gulf Insurance Review Magazine. The award is a testimony to the
efforts of the company in enhancing its brand image in offering value added Shari’a’ compliant
Takaful services and in reinforcing a strong commitment to their customers.



7. Bibliography

Google
www.solidarity


Solidarity report, Kashif Dayo

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