Amãna Takaful Maldives: Annual Report 2016

Transcription

1. STAYING THE COURSE STEADFASTLY AM ÃNA TAKAFUL (MALDIVES) PLC ANNUAL REPORT 2016
2. THE TAKAFUL CONCEPT IS ABOUT PURITY , FAIRNESS AND MUTUAL TRUST. IT IS A COMMITMENT, TO PROVIDE FINANCIAL SECURITY THROUGH SOLIDARITY
3. “OUR OPERATING ENVIRONMENT REMAINED CHALLENGING. YET WE HELD TRUE TO THE CAUSE, LEVERAGING THE COMPANY’S KEY STRENGTHS. Strengths such as our financial stability, the dedication and commitment of our employees and the warm and genuine character we bring to the formation of strong relationships with our customers and the Maldivian people as a whole.”
4. VISION “TO BE A WORLD-CLASS TAKAFUL SERVICE PROVIDER.” We will benchmark our delivery of value, to that of world-class service providers in terms of products and services, whilst upholding the principles of Takaful. Our delivery will reach all our stakeholders, including customers, shareholders, suppliers, regulators, our staff and the community at large. MISSION “Providing total Takaful solutions within the guidelines of Shari’ah and serving all in an admirable manner.” VALUES “As a company and as individuals, we believe in doing what’s right – for what’s right is good. To uphold integrity, sincerity, honesty and mutual respect, whilst committing ourselves to all our stakeholders to consistently deliver exceptional value and to take on challenges that we relentlessly strive to see through.”
5. CONTENTS 04 06 10 14 Financial Highlights Chairman ’s Review Managing Director/ CEO’s Review Board of Directors 17 18 20 22 General Management Committee Heads of Operations Team Product Portfolio Sustainability Report 34 43 48 52 Corporate Governance Enterprise Risk Management Annual Report of the Board of Directors on the Affairs of the Company Report of the Board Audit and Compliance Committee 54 55 87 88 Report of the Shari’ah Advisory Council Financial Reports Share Information Glossary ENCLOSED INNER BACK COVER Form of Proxy Corporate Information 90 Notice of Meeting
6. 4 Annual Report 2016 Am ãna Takaful (Maldives) PLC FINANCIAL HIGHLIGHTS 2016 (MVR) Revenue Total comprehensive income Return on equity (%) 2015 (MVR) 108,681,139 91,102,933 3,299,106 4,992,806 3.22 10.75 101,908,240 85,845,318 22,744,504 22,748,091 703,697 2,267,057 21,943,544 20,173,004 General Takaful Fund Gross written premium Underwriting results Total comprehensive income Shareholders Fund Wakala fee (management fee) Total comprehensive income 2,595,408 2,725,748 Total assets 99,743,194 105,999,809 Issued share capital 26,314,583 26,314,583 Total revenue reserves 21,551,688 23,963,256 Net assets value per share 2.36 2.39 Earnings per share 0.08 0.26
7. Am ãna Takaful (Maldives) PLC Annual Report 2016 FINANCIAL HIGHLIGHTS INVESTMENT INCOME MVR 2,444,081 2015 3,314,484 GROWTH 36% 2016 GROSS WRITTEN PREMIUM MVR 101,908,240 19% 85,845,318 2015 GROWTH 2016 DIVIDEND PAID MVR 3,947,187 2,631,458 2015 GROWTH 50% 2016 5
8. 6 CHAIRMAN ’S REVIEW Annual Report 2016 Amãna Takaful (Maldives) PLC
9. Am ãna Takaful (Maldives) PLC Annual Report 2016 CHAIRMAN’S REVIEW AMÃNA TAKAFUL MALDIVES HAS CONSISTENTLY RECORDED SIGNIFICANT GROWTH IN GROSS WRITTEN PREMIUM (GWP) YEAR ON YEAR, AND EQUALLY WITH ITS RESERVES, TRUE TO ITS PERSEVERANCE, THAT TOO IN A CHALLENGING ENVIRONMENT IN RECENT YEARS 7
10. 8 Annual Report 2016 Am ãna Takaful (Maldives) PLC CHAIRMAN’S REVIEW IN 2016, AMÃNA TAKAFUL MALDIVES MET THE HIGHEST NUMBER OF CLAIMS EVER In the name of the Allah, the Most Beneficent and the Most Merciful. I am pleased to present the Annual Report and the Audited Financial Statements of Amãna Takaful (Maldives) PLC. In doing so, I welcome you all, on behalf of the Board, to the Sixth Annual General Meeting of your Company. BUSINESS RESULTS With a landmark achievement of surpassing the MVR 100 Mn threshold, Amãna Takaful records a total revenue of MVR 109 Mn, a growth of 20% over the previous year. Consolidated profit for the same period is MVR 3.3 Mn. ATM has consistently recorded significant growth in Gross Written Premium (GWP) year on year, and equally with its reserves, true to its perseverance, that too in a challenging environment in recent years. This GWP growth came through with commendable performance in all leading classes. Despite the continued negative impact on being deprived of underwriting Expatriate Medical covers, the Company steered the course, relentlessly strengthening its distributional channels, introduction of niche products and customised solutions. In 2016, ATM met the highest number of claims ever. During the year under review, the General Takaful Fund extended its timely support to the participants who faced unexpected calamities. Such catastrophes were indemnified under the Fire and Engineering classes. Medical claims too took a high toll during the year. True to our promise, we honoured the distinguishing feature of Surplus Award to our clients, for the fifth year in succession. The Fund paid out a surplus of 13%. Additionally, the Board considered ex gratia payments to clients too. Based on the business results, the Company has declared two interim dividends in August and December 2016. In total a 10% dividend on the face value of shares have been distributed to the shareholders. The Board is determined to continue this momentum of sharing gains with its shareholders on a sustainable basis.
11. Am ãna Takaful (Maldives) PLC Annual Report 2016 CHAIRMAN’S REVIEW INVESTMENT INCOME ACKNOWLEDGEMENTS The performance on investment assets, in total however, were impaired, particularly due to equity market fluctuations achieving a lower than expected net return of circa MVR 1.8 Mn. On a positive note, Long-term instruments have over-performed, yielding over 150% compared to the previous financial year. ATM continues to explore creative solutions within the Shari’ah complaint remit to boost its income returns in the coming years. We have also embarked on strategic steps in optimise investments which would create greater synergy and long-term benefit to the Company as well as for the Islamic Finance Industry in the Maldives. I wish to place on record my appreciation to the Regulatory Authorities for their advice and look forward to work together in the years to come. INSURANCE INDUSTRY The overall industry growth is at 21% in 2016. While we welcome the two new entrants into the fray, we anticipate a level playing field by the Regulator and fair competition and support of the players for the benefit of the insuring public. Low rates across all classes of products is a cause for concern. Amãna Takaful will continue to do its part to be a beacon of good corporate conduct and healthy business practices to widen insurance services. As the nation gears up for new infrastructural development and prospects of sustainable economic growth and social well-being, the industry’s insurance penetration must add real value to the GDP. FUTURE In 2017, business potential has shown early signs of widening with mandatory covers imposed by the Authorities. We remain cautiously optimistic that exclusivity privileges given to one company over certain mandatory insurance covers, will now be open to all industry players in a spirit of openness and transparency. We see good opportunities in all aspects of business growth and are ready to take advantage of the opportunities it presents. I also wish to remind and re assure our stakeholders and the insuring public that Amãna Takaful, being the only listed Insurance Company on the Maldives Stock Exchange, with the pioneering status of flag bearer to the Takaful Concept, will steadfastly aspire and ensure to hold aloft the highest levels of Corporate Governance, Ethics and Conduct. In fostering the noble concept of Takaful, I would like to express my thanks to my colleagues on the Board for their active participation in the affairs of our Company and their continued support. The high demands on Service Quality and Customised Solutions from our loyal customers have been the driving force for innovations and technological improvements. I thank them all. The Board joins me in salutation to all staff of Amãna Takaful (Maldives) PLC for their perseverance and high level of commitment for making 2016, a year with commendable performance. Together, we reaffirm our commitment to all stakeholders, to deliver admirably in the up-coming years. Tyeab Akbarally Chairman 20th March 2017 9
12. 10 MANAGING DIRECTOR /CEO’S REVIEW Annual Report 2016 Amãna Takaful (Maldives) PLC
13. Am ãna Takaful (Maldives) PLC Annual Report 2016 MANAGING DIRECTOR/CEO’S REVIEW IN LINE WITH THE THREE-YEAR STRATEGIC PLAN, THE SECOND OF WHICH IS NOW COMPLETE, GOALS SET FOR 2016 WERE REVISITED WITH CAUTIOUS APPROACH, UNDERSTANDING THE COMPELLING BUSINESS ENVIRONMENT 11
14. 12 Annual Report 2016 Am ãna Takaful (Maldives) PLC MANAGING DIRECTOR/CEO’S REVIEW WE TAKE PRIDE IN DEDICATING THE PRESTIGIOUS GOLD ACCOLADE FOR THE ‘TAKAFUL INSTITUTION OF THE YEAR’ AWARDED TO US AT THE ISLAMIC FINANCE FORUM OF SOUTH ASIA (IFFSA), TO ALL OUR CUSTOMERS I am pleased to present our business performance and highlights in the Annual Review of Amãna Takaful (Maldives) PLC for the year 2016. In line with the Three-year Strategic Plan, the second of which is now complete, goals set for 2016 were revisited with cautious approach, understanding the compelling business environment. Our core objective was to explore new business avenues to sustain our profit momentum and stay the course, despite the unfortunate deprivation of one prime product due to directives from the Authorities in the previous year. Action plans had to be reviewed periodically, to stay ahead of emerging insurance requirements. Our unrelenting focus in adding shareholder value, meeting stakeholder expectations is built on the bedrock of a business model of a well-balanced portfolio that leads to sustainable business growth and a robust fund position. Upfront, I wish to pay tribute to our loyal customers, whose demands, challenges our very core, in exceeding their expectations in performance and growth. Modest growth in many aspects of the business is reported, the salient points of which, are enumerated as follows: 1. 19% growth in Gross Written Premium from all leading classes 2. MVR 33.2 Mn in claims settlement, the highest on record 3. Positive underwriting results consistently for the last six years 4. 13% Surplus Award for all non-claimant participants 5. 5% growth of the General Takaful Fund notwithstanding the high volume of claims 6. 10% Dividend distribution in two intervals 7. Strengthened and expanded new distribution channels to reach the untapped segments 8. MVR 5.0 Mn recorded returns in investment assets and other income segments 9. New strategic partnerships as part of service enhancement initiatives 10.Sustained our Market Share
15. Am ãna Takaful (Maldives) PLC Annual Report 2016 MANAGING DIRECTOR/CEO’S REVIEW INSURANCE INDUSTRY FUTURE Growth in the general insurance industry surged to 21% with Gross Written Premium (GWP) income reaching MVR 674 Mn in comparison to a 12% upside in 2015. With more players, the development of the industry is already challenged by absurd pricing and trepidation by the reinsurance fraternity. Regulatory interventions and transfer of best demonstrated practices from other geographies need to be advocated and monitored within an agreed framework to safeguard this nascent industry, and the insuring public. A roadmap for such ethical conduct is strongly advocated. That said, on our part, we will bring a strong voice, staying true to the lofty ideals and ethics the Takaful way. The dominant Fire Class grew by 13% to MVR 240 Mn taking 36% share of market, followed by the Medical Line with a 24% share, growing at 25% to MVR 159 Mn, the latter being propelled by fresh mandatory covers, that favoured exclusivity rights to a single company. Hull and Miscellaneous Classes registered a growth of 20% and 28% respectively. Claims in the Hull Class soared to 69%, compared to the previous year. New mandatory compulsions in this segment are expected to rapidly drive the growth potential in GWP. Overall, reinsurance cost of the Industry has heightened by 24%, corresponding with the growth of the GWP. New development opportunities augur well for business growth in 2017. BUSINESS DEVELOPMENT The Company launched new products and revamped certain existing covers to suit the emerging needs and expectations of our customers, to stay ahead of the game. As part of our culture of continuous improvement and service extension initiatives, we embarked on strategic alliances with institutions and corporates to provide unmatched services and benefits thereby expanding the customer base. In 2016, technological initiatives to transform customer interface and transactional capability became a game changer in the way we do business. IN CONCLUSION Together with my colleagues, I wish to acknowledge the advice, support and guidance of the Board of Directors. The inspiration of the Board, in discharging my duties, spurs us to achieve greater heights. My sincere thanks to the Regulators for their advice and guidance. I also wish to express my gratitude to our business intermediaries such as Brokers, Agents, strategic partners, Re-Takaful operators and financial institutions for their close engagement and immense support in working together. The guidance and support of the Shari’ah Advisory Council is well recognised. I pay tribute to all staff members of ATM for their unrelenting commitment and steadfastness to advance the cause of the ‘Takaful Spirit’. We take pride in dedicating the prestigious Gold Accolade for the ‘Takaful Institution of the Year’ awarded to us at the Islamic Finance Forum of South Asia (IFFSA), to all our customers. TALENT An all pervading High Performance Culture ignites our people development and growth agenda. Nurturing and infusing new skill-sets, secondments, and developing the talent pipeline, drives the very ethos of our service offerings. Hareez Sulaiman Managing Director/CEO 20th March 2017 13
16. 14 Annual Report 2016 Am ãna Takaful (Maldives) PLC BOARD OF DIRECTORS Tyeab Akbarally Chairman Tyeab Akbarally is the Chairman of the Company. He has been appointed to the Board since its inception. He is also a Director of Akbar Brothers Ltd., the largest tea exporter in Sri Lanka. Akbarally’s business interest extends to many sectors of the economy including Pharmaceutical Trade, Hydro, Wind and Solar Power and Commodity Trading. He is also on the Board of several companies in the Akbar Brothers Group and is the Deputy Chairman of Amãna Bank PLC. Osman Kassim Director Osman Kassim, the visionary and one of the main promoters of Amãna Group of Companies is the Chairman of Amãna Bank PLC. Kassim is renowned for his expertise in Islamic Banking & Financial Services and has participated in numerous international fora. He counts over 35 years of senior management experience. Kassim plays a dynamic role in determining and envisaging the strategic path of Amãna Bank and the Group as a whole. He has also served as the Chairman of Expolanka Holdings PLC, one of the largest conglomerates in the country. Osman Kassim has an Honorary Doctorate from the Staffordshire University, UK. Dato’ Mohd Fadzli Yusof Director Dato’ Mohd Fadzli Yusof has been on the Board since its inception. He was the founder Chief Executive Officer of Syarikat Takaful Malaysia Berhad, the first Takaful Operator in Malaysia as well as in Asia, since its incorporation in 1984 until his retirement in 2005. He obtained the professional Diploma in Communication, Advertising and Marketing (CAM) from the CAM Foundation in the United Kingdom in 1976. He started his career in broadcasting, including six years with the BBC External Service in London. Currently he is an independent member of the Board of Amãna Takaful PLC, Sri Lanka and Hei Tech Padu Berhad, Malaysia. He is also a member of the Board of Motor Research Consortium Data Sdn. Bhd, a Subsidiary of Hei Tech Padu Berhad. He has also been appointed as a member of the Board of State Economic Development Corporation of Kelantan, Malaysia. On the academic front he serves as the Fellow, University Islam Malaysia. He is also a member of the Board of Trustees Sultan Mizan Royal Foundation, an NGO institution.
17. Am ãna Takaful (Maldives) PLC Annual Report 2016 BOARD OF DIRECTORS Mohamed Haniffa Mohamed Rafiq Director M.H.M. Rafiq has been on the Board since its inception. He has been involved in the insurance industry for over four decades. His interests are extremely diverse and include Education, Healthcare and Real Estate, just to name a few. Rafiq, with his wealth of experience in the sphere of insurance, plays an active role in Amãna Takaful PLC, Sri Lanka. Muhammad Ehsan Zaheed Director Ehsan Zaheed has been serving the Board of Amãna Takaful (Maldives) PLC since the inception. He also served as Chief Executive Officer of Amãna Takaful PLC, Sri Lanka for almost a decade and now serves as a Non-Executive Director. He is a Fellow Member of The Institute of Chartered Accountants of Sri Lanka and a member of the Institute of Public Accountants of Australia. Zaheed completed his articles at Ernst & Young. Having worked with several leading private sector financial bodies, Zaheed has had immense exposure in Sri Lanka and overseas. Hareez Sulaiman Managing Director/CEO Hareez Sulaiman joined Amãna Takaful Ltd., Sri Lanka as the Internal Auditor in the year 2002. His extensive audit experience in international firms, backed by sound knowledge in finance, enabled him to make a remarkable career progression in the field of Takaful within a very short period of time. Sulaiman has pursued his higher studies in the field of finance both academically and professionally. He holds an Honours Degree in Accountancy from the International Islamic University of Malaysia and is also an Associate Member of the Chartered Institute of Management Accountants in UK. He has further enhanced his knowledge in Islamic finance by completing the study programmes in Islamic Finance offered by CIMA (UK). With 15 years of Takaful experience to his credit, Hareez Sulaiman now leads Amãna Takaful (Maldives) as its Chief Executive Officer cum Managing Director. 15
18. 16 Annual Report 2016 Am ãna Takaful (Maldives) PLC BOARD OF DIRECTORS Dr. Abdullah Shiham Hassan Director Dr. Abdullah Shiham Hassan has been serving the Board of ATM since 20th March 2012. Dr. Shiham is a founder member of the Fiqh Academy of Maldives at the Ministry of Islamic Affairs. He had also been serving the Maldives National University (MNU) as a Senior Lecturer and Head of Law Department of the Faculty of Shari’ah. Additionally, he had been instrumental in establishing the Maldives Islamic Bank (MIB) while serving as Advisor for Islamic Finance of Maldives Monetary Authority (MMA) from 2008 to 2010. In 2009, he established the Institute of Islamic Finance Maldives (IIFM) and he is currently the Dean and a Lecturer of the Institute. Dr. Shiham holds a PhD (Laws) specialising in Regulatory Framework for Islamic Banking and a Master of Comparative Laws (MCL) specialising in Islamic insurance (Takaful) from the International Islamic University, Malaysia (IIUM). His undergraduate studies leading to Bachelor of Law (Hons.) were undertaken in University of Tasmania, Australia and Ahamdu Bello University (ABU), Nigeria. His diplomatic services were offered to the Ministry of Foreign Affairs of Maldives since 1978 in various capacities locally and internationally. Civil services for the Maldivian Government were delivered at the Ministry of Transport and Ministry of Trade and Industry in the capacity of Secretary and Assistant Under-Secretary.
19. Am ãna Takaful (Maldives) PLC Annual Report 2016 GENERAL MANAGEMENT COMMITTEE Asif Mohamed Head of Human Resources Mohamed Siraj Nizam Head of Finance Asif Mohamed joined Amãna Takaful Maldives in 2006 and he has served more than a decade in the Industry. He has an extensive knowledge and experience acquired over the years of service in cross-functional areas of business and management. He holds a Postgraduate Diploma in Islamic Banking and Insurance from the Institute of Islamic Banking and Insurance (IIBI), UK and he is an Associate Fellow of IIBI. Siraj Nizam, joined Amãna Takaful Group in 2002 and was seconded to Maldives during 2013. He has over 14 years of experience in Accounting, Finance as well as Treasury and has progressed through various positions during this period. He holds a CIMA Advance Diploma in MA, UK and also holds an Award in Financial Planning with CII UK. Mohamed Imran Ramzan Head of Sales and Marketing Shakir Mohamed Head of Operations Mohamed Imran Ramzan joined Amãna Takaful Group in 2006 and has been serving Amãna Takaful (Maldives) PLC for over a decade with utmost dedication. He has a span of over seven years of experience in Client Relationship Management and Hospitality, prior to joining Takaful Industry, which awarded him the highest sales performance in multiple years. Shakir Mohamed has been serving Amãna Takaful Group for over a decade and was seconded to Maldives in 2007 from Amãna Takaful PLC, Sri Lanka. He has served the Company in various positions during his career, which includied being Head of Finance whilst presently serving as Head of Operations since 2013. He holds a Master’s degree in Business Administration (MBA) from University of Sunderland, UK and he also has an Extended Diploma in Strategic Management and Leadership from BTEC Edexcel, UK. . He holds a Postgraduate Diploma in Islamic Banking and Insurance from IIBI (UK), Diploma in Malaysian Insurance Institute (DMII) and is also a Life Member of the Association of Accounting Technicians of Sri Lanka. 17
20. 18 Annual Report 2016 Am ãna Takaful (Maldives) PLC HEADS OF OPERATIONS TEAM Vajira Kasun Manager – Underwriting Hisham Nimal Assistant Manager – Medical Takaful Operations Rifaz Ahamed Manager – General Claims Ahmed Ajwadh Senior Accountant