Alhuda CIBE - Islamic Finance & Investment Symposium by Sohail Jaffar

1. The Role of International Insurance CompaniesThe Role of International Insurance Companies
in the opening of frontiers: development ofin the opening of frontiers: development of
new productsnew products
(Takaful)(Takaful)
Sohail JafferSohail Jaffer
Partner, FWU GroupPartner, FWU Group
FWU group won the Euromoney Islamic Finance Award
for being the "Best Islamic white label service provider“.

2. 2
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

3. 3
FWU’s definition of BancassuranceFWU’s definition of Bancassurance
«Bancassurance is defined as
the delivery and distribution of
a suitable range of tailored
‘bankable’ protection and long
term savings and pension
products designed to meet the
lifecycle needs of the
customer base of a bank or
other financial institution.»
CustomerDemand Driven

4. 4
Bancassurance - Asset Management - FactoringBancassurance - Asset Management - Factoring
FWU-GROUP‘s Core Business CompetenciesFWU-GROUP‘s Core Business Competencies
The group is wellThe group is well
positioned to meet the lifepositioned to meet the life
assurance, investmentassurance, investment
and pension needs ofand pension needs of
institutional and privateinstitutional and private
clients in Europe, Middleclients in Europe, Middle
East and Asia with state ofEast and Asia with state of
the art bancassurance &the art bancassurance &
Shari‘a compliant LifeShari‘a compliant Life
products.products.
GermanyGermany
LuxembourgLuxembourg
AustriaAustria
ItalyItaly
FranceFrance
Saudi ArabiaSaudi Arabia
United Arab EmiratesUnited Arab Emirates
PakistanPakistan
MalaysiaMalaysia
KuwaitKuwait

5. 5
FWU Group’s International Business ModelFWU Group’s International Business Model
 Clone international
Bancassurance
success
 customer convenience
 tailored ‘white label’ solutions
 quality training and sales support
FWU Shari’ah Board
&
Expertise
 commission factoring solution
 exclusive Retakaful solution
 selection of service providers incl.
custodian bank
 Web-based POS &
Admin System
 Strategic Product
Partners
 Structured asset
management approach
 Product &
process innovation

6. 6
Benefits of ‘White label’ Bancassurance SolutionBenefits of ‘White label’ Bancassurance Solution
 Bank defines own
commission level
 Tailored customer
solutions
Bank offers choice of
both conventional
Bancassurance and
Takaful products
Bank has choice to participate in other
modules of the service value chain
(custodian, brokerage, transaction banking)
 Structured asset
mgt. approach
linked to open inv.
architecture
 Seamless integration
into Bank’s own brand

7. 7
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

8. 8
FWU Group‘s international Bank distribution andFWU Group‘s international Bank distribution and
Strategic product partnersStrategic product partners
 Product administration,
and claims management
 Customer statements
 Financial accounting
 Filing with local regulatory
authorities
 New product development,
 Product launch support
 Product management,
Marketing & Training
support
 Structured asset mgt.
apporach
 Systems support to
Strategic Product Partner
and Bank Distribution
Partner
 Product enhancements &
Shari’ah compliance
FWU Int. Network
Dubai, KL
& Luxembourg
Aman Insurance
UAE
Al Ahli Takaful
Company
KSA
EFU Life Insurance
Pakistan
Takaful Ikhlas
Malaysia Bank is Custodian of all customer
funds in the Savings Plan
Bank Customers
Al Safat Takaful
Company
Kuwait
Bank Distribution Partners
 FWU's existing distribution partners
include: NCB in KSA and ADCB in
UAE
Local Life
Insurance Product Partner

9. 9
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

10. 10
Main product features and customer benefitsMain product features and customer benefits
FWU Group‘s "White Label" Savings, Education and Retirement Plans –FWU Group‘s "White Label" Savings, Education and Retirement Plans –
Product HighlightsProduct Highlights
 Plan benefits are available to all bank
customers
 No medical examination of bank
customer required (up to a defined
limit)
 Transparent and cost efficient
structure
 Accelerated sales process using
FWU’s Point of Sale and
Administration technology
 Plan benefits are available
immediately to all bank customers
 All bank customers are insurable
 Eliminates important psychological
barrier
 Greater customer comfort
 Immediate risk cover for bank
customer
Product features Customer Benefits
 Bank customer convenience

11. 11
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
USD('000)
Year 1 Year 2 Year 3 Year 4 Year 5
Bank Income Growth – 5 year period
Conservative
Average
Best
Bank Annuity Income: Attractive Dynamics
Conservative Average Best
Base Assumptions:
Number of Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 40,000 50,000
Average duration 15 years
Average monthly contribution $ 200
Lapsation rate 2 to 10 % p.a
Fund growth rate 7 % p.a

12. 12
Cumulative Bank Income over a 5 year period
0
5
10
15
20
US$inMillions
Conservative Average Best

13. 13
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

14. 14
FWU’s fund
selection and
allocation
model
Structured Asset Management Approach
Overweights the winners &
underweights the losers
Objective
Investment
process
Agreed funds
target universe
Enhance return by
15% to 25% p.a

15. 15
Fund Selection Process
 Based on Funds’ returns, risk and
correlation amongst each other,
funds are ranked from best to
worst => Each fund is given a
score, based on its ranking.
 Using the above rankings
=> Top eight funds are selected.
FWU‘s Dynamic Fund Selection
and Allocation Model

16. 16
FWU‘s Dynamic Fund Selection
and Allocation Model
Allocation model (key value added)
 Overweighting of the outperformer
 Underweighting of the underperformer

17. 17
Investment Proposal for Regular and Single Premium
Savings Plans
FWU‘s Dynamic Fund Select & Allocation Model
Investment in External Islamic Mutual Funds
Strategy 1Strategy 1
Conservative
Portfolio
Strategy 2Strategy 2
Balanced
Portfolio
Strategy 3Strategy 3
Growth
Portfolio
Launched as internal funds of
FWU‘s local Takaful Product Partner
Strategy 4Strategy 4
Dynamic
Portfolio

18. 18
Investment Advantages of Pooling
0-10080:2050:5025:75
Conservative
portfolio
Balanced
portfolio
Growth
portfolio
Dynamic
portfolio
Equity Pool
Cash
Equivalent
Pool
Direct Investment in:
 Sukuk
 Murabaha
 Trade-Finance
Custodian
Bank

19. 19
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

20. 20
The value added – why FWU GroupThe value added – why FWU Group
 Customised
product design
 Product training
and sales support
 Business simulation
model
 Regional service
hubs
 Sophisticated Point of
Sale and Administration
System
 Dynamic funds select and
allocation model
 Cost efficient Agency structure
 Unique Retakaful arrangement
ENTREPRENEURIALENTREPRENEURIAL
PARTNERPARTNER
INNOVATIONINNOVATION

21. 21
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Product Highlights and customer benefits
 Dynamic Fund Selection and Allocation Model
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

22. 22
FWU-Group‘s Exclusive Retakaful Pooling ArrangementFWU-Group‘s Exclusive Retakaful Pooling Arrangement
FWUFWU –– GROUPGROUP
Administrator
-Data processing
and administration
Asset Management
Hannover Re
(„AAA rated“,
3rd largest
life Reinsurance)
Wakeel/Trustee
- Fee Basis
- 100% profit redistribution
- Quard Hasna
- Shari‘ah compliant Investments
PoolingPooling
ArrangementArrangement
The National
Commercial Bank
Jeddah
Abu Dhabi
Commercial
Bank
Major Bank
Distribution-
Partners
Major Bank
KSA UAE Pakistan Malaysia
Bank distribution partners in the following markets
Insurance
Partners
Al Ahli Takaful
Company
NCB/FWU / IFC
Dubai Islamic
Insurance &
Reinsurance
AMAN
Eastern
Federal
Union Life
EFU
Takaful
Ikhlas
SDN BHD
Establishment of insurance provider through joint venture or strategic cooperation
agreement
Major Bank
Kuwait
Al Safat Takaful
Company

23. 23
ContentsContents
 FWU’s International Business Model
 International Bank Distribution and Strategic Product
Partners
 Retakaful Pooling Arrangement
 Structured Asset Management Approach
 FWU’s Value Added
 FWU’s Retakaful Pooling Arrangement
 FWU Group

24. 24
Dr. Manfred J. Dirrheimer andDr. Manfred J. Dirrheimer and
PartnersPartners
Dr. Manfred J. Dirrheimer andDr. Manfred J. Dirrheimer and
PartnersPartners
VHV
Versicherungen,
Hanover
VHV
Versicherungen,
Hanover
95%
FWU AGFWU AG
Munich, Luxembourg, Dubai, Kuala LumpurMunich, Luxembourg, Dubai, Kuala Lumpur
80%74,9% 100% 10%
25,1% 25,1%
5%
100%
PREMIUM SELECT
LUX S.A.
Luxembourg
ATLANTICLUX Life
Insurances S.A.
Luxembourg
FWU Payment
Services GmbH
Munich
FWU Commission
Factoring GmbH
Munich
Al Ahli Takaful
Company
Jeddah, KSA
Swiss Re Frankona
Rückvers. AG,
Munich
Swiss Re Frankona
Rückvers. AG,
Munich
13,25% 30%
An entrepreneurial and institutional partnership
90%
National Commercial
Bank,
Jeddah, KSA
National Commercial
Bank,
Jeddah, KSA
VHV
Versicherungen,
Hanover
VHV
Versicherungen,
Hanover
IFC International Finance
Cooperation
Washington
IFC International Finance
Cooperation
Washington
Wave Asset
Management AG
Hamburg
13,25%
FWU-GRUPPE
Branch
Bolzano
Branch
Bolzano
Branch Luxemburg
International HQ
Branch Dubai
Regional HQ ME
Branch Dubai
Regional HQ ME
Branch Kuala
Lumpur
Regional HQ FE
Branch Kuala
Lumpur
Regional HQ FE
7,5%

25. 25
FWU Group – ProfileFWU Group – Profile
 The FWU Group is an entrepreneurial financial services group with
headquarters in Munich, Germany.
 Further offices are located in Luxembourg and Dubai Internet City (DIC).
 Group shareholders include GE Frankona Re AG, an international re-
insurer, and European banks and insurance companies.
 Core activities are Bancassurance, Savings & Pension Plans and Asset
Management.
 Group subsidiaries include:
– an Asset Management Company (PREMIUM SELECT LUX S.A.)
– a Life Insurance Company (ATLANTICLUX S.A.)
Both are based and regulated in Luxembourg.

26. 26
ContactContact
The information in this presentation does not constitute a sales offer, investment advice or an offer for the
acquisition of financial products or instruments, and shall not in this regard imply legal obligations for the
FWU Group or anybody else towards the readers of this presentation.
This presentation is solely intended to provide information on matters of interest for the readers and such
information is not meant to replace the knowledge and the judgment of the readers who should make all
appropriate inquiries.
Mr. Sohail JafferMr. Sohail Jaffer
Partner, FWU Group
2, Rue Sainte Zithe
L-2763 Luxembourg
Email: s.jaffer@fwugroup.com
Tel: +352 – 2 61 97 700
Fax: +352 – 2 61 97 800
Internet: www.fwugroup.com