Andrew Bibby


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Andrew Bibby is a professional writer and journalist, working as an independent consultant for a number of international and national organisations, and as a regular contributor to British national newspapers and magazines. He is also the author of a number of books.

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Profile of a chief executive:

Syed Moheeb (Takaful Ikhlas)

This article by Andrew Bibby, in a slightly different form, was first published by ICMIF (International Cooperative & Mutual Insurance Federation) in Voice magazine, 2011

Motor bikes have long been a passion for Syed Moheeb bin Syed Kamarulzaman. One of his first bikes, a Triumph Tiger 500, accompanied him at the Institute Tecknologi Mara (now Malaysia 's prestigious Universiti Teknologi Mara) where he studied for a law degree, and since then the bikes have gradually increased in size and number. He currently owns a Honda Goldwing, an imposing machine driven by an 1800 litre engine, a BMW F650GS as well as a Harley-Davidson Sportster 1200. Owning a Harley-Davidson was something of an ambition for him as a young man, an ambition he finally realised in his mid-fifties.

Powerful motor bikes are renowned for their fast acceleration from a standing start. It's an analogy which could also be applied to Takaful Ikhlas, the takaful operation which Syed Moheeb established less than eight years ago and which has grown rapidly in the years since then. Syed Moheeb says his organisation has achieved gross contribution income of about 630m Malaysian Ringgits (USD 230m) this year, up from MYR 580m last year and MYR 420m the year before that. It's a long way from the first year of operation in 2003-4, when the financial accounts showed a figure of just RYM 7m.

Syed Moheeb has been able to bring his years of experience in insurance, including first-hand knowledge of major UK , US and German firms, to the fast-growing world of takaful, the Islamic form of mutual protection against accident and loss. He moved into a career in insurance a little by chance after his law degree, working for Royal Insurance for almost fifteen years, then moving to Aetna, before taking over the top job at Malaysian insurer SEA (now Uni.Asia General Insurance). Thereafter he moved to head up the Malaysian operations of the German-based reinsurer Gerling Global Re.

But then in 2002 came the exciting invitation to start Takaful Ikhlas, a brand-new player in what was then Malaysia 's embryonic takaful sector. Takaful operators are licensed in Malaysia by the national bank Bank Negara Malaysia , and although takaful legislation dates back to 1984 it has really only been in the last ten years that the sector has developed. In total, Malaysia 's licensed takaful operators (there are currently eight) have contributions of about MYR 3.5bn, perhaps a quarter of the worldwide takaful market.

Over the years, Syed Moheeb has become used to explaining the concept of takaful, both to Muslims and non-Muslims in his own country and to a worldwide audience. Like conventional insurance, takaful offers a way of achieving a measure of protection against the accidents and losses which life can throw up. Unlike conventional insurance, however, where risks are taken on by the insurer, in takaful the principle is one of mutual support. Participants in a takaful scheme commit to helping those among them who encounter difficulties – takaful is, indeed, the Arabic word meaning ‘joint guarantee' or ‘guaranteeing each other'.

This element of mutual support and help for others in difficulty is an interesting echo of the practices developed by Muslim Arabs in the second century of the Islamic era, when traders who were venturing to China banded together to help any of their number who encountered robberies or mishaps. It also marks an obvious point of similarity with mutual and cooperative insurance traditions, something which Syed Moheeb is keen to emphasise. His own organisation has just hosted the third ICMIF Takaful Network meeting, held in Kuala Lumpur at the end of October, an event which was held under the slogan Back to Basics: Mutuality in Takaful. “Principles of mutuality should permeate every aspect of takaful, and be practised within takaful corporations,” Syed Moheeb says. He is concerned that the recent rapid growth of takaful across the Muslim world is at risk of leaving this behind.

“One can't run a takaful company the conventional way. One needs to understand the fundamentals of Islamic financial transaction and embed the principles in the products and operations,” he explains. He refers particularly to the guidance offered by the highly respected Islamic scholar Sheikh Yusuf Qaradawi, who stresses both the element of mutual support and the principle that the takaful contribution is a form of conditional donation made in a spirit of charitable intent for others. “In takaful, you are actually putting the money into the pool with a niat , a benevolent wish,” Syed Moheeb explains.

“Today's takaful practices appear to be moving away from the fundamental elements of mutuality,” he continues. “Latest approaches on governance also appear to ignore the scholastic view. Perhaps all in the industry should take a step back and review the statement of Sheikh Yusuf Qaradawi. Merely setting up a takaful company and calling it just that may not be fulfilling Sheikh Yusuf Qaradawi's proposition,” he says.

Ikhlas means ‘sincere' in both Arabic and Malay, and Syed Moheeb has been concerned to ensure that Takaful Ikhlas lives up to its name. “We need to ensure that our customers find it easy and pleasant to do business with us. We need to ensure excellent customer service, and the means to do this is to ensure operational excellence,” he says. He adds that the original strategic blueprint on which the organisation was established stressed the importance of building an effective and responsive organisation.

In part, this has been done by a determination to maximise the opportunities of new technology. Takaful Ikhlas has not been afraid when necessary to invest in state-of-the-art systems, and it was one of the first operators to enable its customers to have instant electronic motor cover notes. It also operates an innovative electronic claims estimation system, expediting the process of claims handling for its customers. “Additionally, we have developed our back-end system, comprising individual, family, group and employee benefit and general takaful, to sit on a single platform. This enables us to have a single view of any of our clients,” Syed Moheeb says.

He has also been concerned to make use of current good practice elsewhere in the insurance world. “At the outset, we focused on organisational development based on the European Quality Business Model. We monitored everything using the Balanced Scorecard approach. We are ISO certified, and this means we monitor internal service compliance diligently. We conduct annual customer service surveys, which assess five different pulse-points, and we have in place a robust complaints management programme,” he says. He adds that the company has made use of the ‘Lean Sigma' approach, the management tool which has recently been developed applying lean manufacturing principles to the Six Sigma strategy first developed by Motorola.

Although in many ways his organisation operates in a very similar way to conventional insurers, its structural relationship with its customers is different. As a takaful operator its role is that of agent, administering the takaful fund on behalf of its members. It earns its remuneration for this function by drawing wakalah (agency) fees. Under Malaysian takaful law, there are also requirements for the operator to support takaful funds which are temporarily in deficit as a result of excessive claims.

Takaful Ikhlas follows the conventional insurance distinction between life and non-life policies, in its case differentiating ‘Family Takaful' from ‘General Takaful'. The first of these is the most important element of its business, comprising roughly 70% of income. Two-fifths of this business comes through the arrangements which Takaful Ikhlas has instituted with twelve Islamic banks, with individual insurance agents and brokers responsible for the vast remainder of the business. Takaful Ikhbal has built up a network of twelve branch offices, including branches in East Malaysia (Sabah and Sarawak ), but these are essentially service hubs rather than distribution channels in their own right.

In total, Takaful Ikhbal has about 1.7 million policyholders and approaching ninety individual products on offer. Some of these are innovative. One product, for example, offers health and medical protection specifically focused on women's needs; another helps Muslims wanting to save for the Hajj pilgrimage to Mecca , whilst also offering death and disability protection at very low rates.

Takaful Ikhbal's rapid growth since it began operating in 2003 will perhaps be viewed with some envy by ICMIF members in more mature insurance markets. Syed Moheeb says that both conventional insurance and – particularly - takaful are underdeveloped in Malaysia , with takaful not only of potential interest to Muslims. “We have not been as successful as others in tapping the non-Muslim market segment, and we are studying what we could and should do differently,” he says. One way of developing this is by increasing the use of non-Muslim agents. “We find that non-Muslim agents are able to promote takaful because of its transparent nature and underlying concepts,” he adds.

Takaful Ikhlas, which is a wholly-owned subsidiary of MNRB (Malaysian National Reinsurance), must also get ready for an imminent increase in competition. The Malaysian authorities this year licensed further operators to join the existing eight takaful organisations, authorising four new firms rather than the two which many had anticipated. “Competition is part of business life. Our enterprise risk management framework recognises competition as a major threat, and as a mitigation measure Takaful Ikhlas has been preparing for increased competition by ensuring customer centricity and operational excellence,” Syed Moheeb says.

His strong belief is that the ethical and religious principles which underpin Takaful Ikhlas should strengthen the work of his organisation. “Doing business with virtue has never been a problem. Religious and professional obligations have never clashed. In fact, being spiritually attuned makes one a better professional,” he says. Takaful Ikhlas works hard to ensure that its staff also share this perspective: “staff need to be imbued with the right spiritual passion,” he says.

His concerns that the takaful concept could be undermined by other operators less attuned to Islamic shariah principles leads him to stress the valuable role which ICMIF can perform. “ Shariah divergence and variances in opinions on governance between regulators, scholars and practitioners need to be resolved fast for the industry to develop positively. ICMIF can help crystallise Sheikh Yusuf Qaradawi's call to set up Muslim-based cooperative insurance companies. ICMIF could perhaps be the platform for interaction amongst Islamic scholars and researchers, Islamic finance training and education institutes, regulators and practitioners,” he says. He also advocates visits and staff exchanges between mutual and takaful members of ICMIF.

Although it is Takaful Ikhtal's funds which are mutual rather than the organisation's ownership structure, Syed Moheeb himself has a deep understanding of the cooperative tradition, as he explains: “You could say that the cooperative spirit is apparent in my DNA. My maternal great-grandfather and paternal grandfather were amongst the first Malay cooperative officers recruited by the British Governor in 1921. My father followed their footsteps and started his working life in the civil service as a cooperative officer; he served the government 40 years, all the time involved in cooperative and rural development. He was the
secretary that called for the formation of a cooperative bank in 1953 (Bank Agong, as it was known then, was eventually set up in 1954, now known as Bank Rakyat Kerjasama). He was the principal of the Cooperative College in the late 60s and early 70s. He travelled widely ( Philippines , Burma , Congo ,
Ceylon , Ghana , Lebanon , Canada , USA , UK amongst others) to share the Malayan experience in cooperative and rural development.“

Syed Moheeb himself has travelled widely for his work, but there are also for the journeys he makes for pleasure, very often on one of his beloved motor bikes and covering huge distances. Being planned for 2011 is a trans-Borneo trip, and either a tour of New Zealand 's South Island or a cross-US journey from Los Angeles to Miami . Before that is an adventure closer to home: “My pals and I will be riding to Cambodia next month, a 5000 km round trip!”, he explains.

There are other passions, too. Sport has been important in his life. Syed Moheeb used to play rugby in his local league, but switched to road running after getting injured. His tally of full marathons stands at nine and he has run almost fifty half-marathons, although unfortunately running too had to be given up for health reasons. Photography however remains a keen interest.

And then there is music. He plays drums and percussion in a band which he formed with friends from school-days and which for the last thirty years has been offering cover versions of hits from the 1960s and 1970s. Songs from Bad Company, Ten Years After, Creedence Clearwater Revival and Grand Funk Railroad are among the repertoire. “We've been playing the same songs since the 60s, and we're playing as bad as ever,” he jokes. It's certainly an element of his CV which not many other ICMIF chief executives have yet managed to emulate.

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