[KUALA LUMPUR] Zurich Insurance is set to take full ownership of Malaysia's MAA Takaful after the deal received regulatory approval, giving Europe's fifth-biggest insurer a foothold in the world's second largest Islamic insurance market.
MAA Takaful, one of Malaysia's 11 Islamic insurers, is a joint venture launched in 2006 by MAA Group Berhad and Bahrain's Solidarity, which hold 75 per cent and 25 per cent stakes respectively.
MAA Group said it had received central bank approval for the sale, a deal which was first proposed in November of last year. No size for the transaction was given.
MAA Takaful held RM1.2 billion (S$410 million) worth of assets as of June 2015, a 5 per cent increase from a year earlier.
The Swiss insurer has been reshaping its geographic footprint, scaling back parts of its Asian franchise seeking to build more sustainable businesses and improve profitability.
A move into takaful could allow for greater penetration in core markets in the Gulf and southeast Asia. Zurich Insurance also has a presence in Bahrain, Qatar and the United Arab Emirates.
An alternative to conventional insurance, takaful is based on the concept of mutuality; the takaful company oversees a pool of funds contributed by all policy holders.
In their investments, takaful firms follow religious guidelines, including bans on interest and pure monetary speculation, and a prohibition on investing in industries such as alcohol and gambling.