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Rajesh Sethi (CEO – Dar Al Takaful):

Digitalization increases growth in retail segment

for UAE’s second largest Islamic Insurer

Dubai-based Islamic insurer, Dar Al Takaful, has recently completed the
acquisition of another Dubai-based Islamic insurer, Noor Takaful, with Rajesh
Sethi appointed as CEO of Dar Al Takaful. Sethi was the erstwhile CEO of Noor
Takaful. Sethi brings over 30 years of experience in the investment banking, and
insurance sectors. Previously, he has worked in leadership roles across Asia, Europe
and the MENA region, and brings expertise in strategy formulation, execution, and
building customer centric businesses. Sethi is a long-time believer in the untapped
potential of the Takaful industry in the UAE and he always strives to make an
impact and strengthen the industry for the benefit of the customers, employees and
shareholders. Al Bayan Magazine met Sethi on the occasion of its annual publica-
tion and conducted the following interview.

* Last year, Dar Al Takaful acquired Noor Takaful. tory approvals for the transaction. volatility, have better disclosure, and motivate long
How do you evaluate this acquisition process? term ethical behaviour by the takaful operator.
- The first year has been challenging and at the * Digitalization has become a must. What are you
same time very gratifying. Because it was the first offering in that sense? * In your opinion what should the regulators do
acquisition in the UAE Takaful insurance sector, the - There is no choice in this matter: digitalization and to enhance the Takaful industry in UAE?
process was new for everybody. It was refreshing to automation have become the dominant ways to - The Takaful sector has had a long history in the
organize our business, making sure our clients deliver products and services. The race is on - how UAE, and our regulators have always been among
understand our strategy and mission, and meeting fast and how comprehensively can you service your the most progressive. The market share of Takaful
all the regulators’ requirements, especially in the clients. In our roadmap we identified certain products operators (based on the gross written contribution of
challenging Covid environment. It was also very grat- on which we wanted to focus immediately - motor listed companies) is nearly 20%. In short, the Takaful
ifying because in the process of combining busi- takaful and medical takaful. Hence we have focused sector has bloomed and thrived over the years. The
nesses, you are dealing with new clients, making on advanced motor and medical portals for brokers focus of the regulators is to ensure high standards of
new kinds of products and expanding with wider and individuals – now anyone can buy our wide compliance, and a level playing field among Takaful
reach into all customer segments. So we have dou- range of motor and medical products online and cov- and Conventional companies. In addition, regulators
bled our business with several clients and we are erage starts immediately. Our next focus is on mid- must keep up with new developments in other mar-
writing more business on an optimized platform, thus market companies to ensure they can directly pur- kets and make timely policies with a positive growth
generating positive synergies. In particular, our rein- chase motor and medical products, even for the mindset. New trends in motor takaful (such as telem-
surance capacity has increased substantially, which most sophisticated demands. atics), medical takaful (such as digital health and
allows us to underwrite larger risks more securely. well-being) and innovative retakaful opportunities
Thus, it has been a very positive gratifying journey * Do you think digitalization will help increase the (such as cyber security) represent excellent growth
for the managemenet team and the shareholders. insurance penetration in the region? opportunities for the takaful/ insurance sector.
- Of course, especially for motor and medical prod-
* Usually, when a new company is established it ucts which have mandatory minimums and addition- * Are you satisfied with your results during 2021?
takes some time for it to start making profits. al opportunities for customisation. As far as penetra- - In the first six months of 2021, our net profit was
Was it the same situation for Dar Al Takaful? tion is concerned, I think aggregators saw that 14.5 million dirhams. In 2020 our net profit was 22.5
- We were fortunate because both Dar Al Takaful and opportunity before insurance companies. million dirhams for the full year. The interesting and
Noor Takaful are very solvent companies, so we Aggregators have helped deliver insurance products positive development is that since February 2021 the
immediately saw the benefits of the acquisition - in the ‘last mile’ because they are particularly effi- economy has accelerated faster than anticipated.
doing more business with better systems, a more cient at comparing many different plans on the same Every benchmark has moved in a positive direction –
optimized approach to customers and improved platform. During Covid, aggregators were particular- more people, more economic activity, more opportu-
financial results. In addition, the acquisition of Noor ly successful in accelerating penetration and building nities for all industries. The trends in the insurance
Takaful included the Family/ Life business, which is a a service proposition. Our regulators have also been industry always follow the overall economy. I am
new line of business for Dar Al Takaful. Overall, it particularly proactive and have supported digital pen- confident that as the general economy accelerates
was beneficial for the combined companies to come etration for the industry with visionary regulations to further, it will bring prosperity and growth to all sec-
together. ensure a fair playing field. tors, especially financial services companies.

* What is your comment about the mergers and * What is the difference between conventional There is a massive opportunity
acquisitions that took place in the region in the and Takaful companies in terms of digitalization? for us in the “retail” segment
last three years? - Although there are fundamental differences in the
- There are a lot of companies considering M&A but approach of conventional insurance (based on risk * What will be your strategy for 2022?
it does require two parties to agree on a price and transfer) and takaful (based on risk sharing and pool- - With Dar Al Takaful and Noor Takaful coming
who will manage the combined business. Many fac- ing), the new digitalization initiatives allow the cus- together as the UAE’s second largest Takaful com-
tors have to come together to make M&A successful, tomer to have similar customer journeys for both pany, our key customers are mainly in the “retail|”
and we should not forget the positive role of the reg- types of insurance/ takaful. We believe that the prin- segment which comprises mid-market companies
ulators to ensure success. The regulators have ciples and spirit of our Shari’ah board decisions and and individual customers. We believe there is a mas-
imposed important compliance requirements to safe- product structures percolate into every product. sive growth opportunity in this retail segment, and we
guard customers, shareholders and the insurance Besides the risk transfer/ risk sharing mentioned are enhancing our products and distribution chan-
industry. So, M&A is a combination of many aspects. above, the main differences are in product features, nels to access customers with certain characteris-
Our shareholders have a strong belief in the outlook the investments we make, the separation of our tics. In addition, as market penetration increases,
of the Takaful sector. In the case of Noor Takaful, the pools for payment of claims and a fixed ‘wakala’ to there are huge opportunities for cross selling a curat-
major selling shareholder (Noor Investment Group) the operator for managing the pool. From a customer ed mix of products to individuals (such as motor,
was fully exiting the business. Our shareholders point of view, it may look similar but the way the home, travel and medical) as well as companies
therefore saw an excellent growth opportunity which products are managed is quite different. Shari’ah- (such as fire, liability, medical and cyber insurance).
enabled Dar Al Takaful to obtain the required regula- approved takaful products are exposed to less

583 AL BAYAN ECONOMIC MAG - ISSUE 602 - JANUARY 2022