Best Takaful Provider (Global Finance 2008) : Solidarity Group

Solidarity was established with the vision of becoming the world’s leading takaful Company, generating superior returns for shareholders and policyholders alike. The plans for increase of capital, growth by geographical expansion and acquisition currently being articulated, have highlighted the need for corporate re-structuring in order to focus more effectively on achieving these objectives.

During 2007, the Company had three key areas of activity; General Takaful, Family Takaful, and Asset Management & Investments. These were supported by centralised Corporate Services covering Human Resources, Information Technology, Legal & Compliance, Finance and Corporate Communications.

In order to meet Solidarity’s planned business growth and strategic expansion, during 2007, the Board approved a proposal to convert the Company’s corporate structure into a group holding structure.As a result, Solidarity has recently restructured into an insurance Group with the Company becoming Solidarity Group Holding, having two fully owned subsidiaries – Solidarity Family Takaful Company and Solidarity General Takaful Company – incorporated to carryon the group’s core takaful operations -providing Family & General Islamic Sharia compliant takaful products respectively.

Solidarity’s vision is to be a leading international Islamic-oriented financial services group generating superior returns to shareholders.Solidarity’s mission is to provide a range of Shariah compliant protection, savings and investment products with quality customer service.As a responsible corporate member of the communities it serves, Solidarity values (in alphabetical order):Innovation, Integrity, Social Responsibility, Teamwork & Partnership and Transparency.

The Company is controlled through its Board of Directors. The Board’s main roles are to provide entrepreneurial leadership, approve strategic policies, plans and objectives and ensure that the necessary financial and other resources are made available to meet those objectives. The Board has formed two sub-committees, the Executive Committee and the Audit committee. The roles and responsibilities of these committees have been defined by the Board.

The Legal & Compliance Department is guided in executing its works by the Anti-Money Laundering Manual. The AML Manual contains policies, procedures and guidelines adopted by Solidarity, to ensure compliance and adherence to the requirements of the Anti-Money Laundering Act & Legislation as well as the Financial Crime Module (“FC module”) of the Insurance Rulebook (Volume 3) issued by the Central Bank of Bahrain (CBB), with relevant updates being issued from time to time.

The Compliance Department exists as a mechanism for ensuring that the sales standards of Solidarity Company are met. These standards are derived from the internationally accepted principle of best advice and the regulatory requirements of the financial supervisory bodies in the territories in which Solidarity will write business. It is anticipated that, with time, external regulation will increase and that, as it does, Solidarity’s standards will adapt to accommodate the new requirements.

The Internal Audit department is an independent appraisal activity established within Solidarity to examine and evaluate its activities. The objectives of internal auditing are to assist members of the organization in the effective discharge of their responsibilities by furnishing them with analysis, appraisals, recommendations, counsel, and information concerning the activities reviewed and by promoting effective control at reasonable cost.

The authority and responsibilities of the Department are established by the Audit Committee on behalf of the Board of Directors. Internal audit staffs are authorized, within agreed plan and mandate, to review all areas of the Company and to have full, free, and unrestricted access to all Company activities, records, property, and personnel.

Good corporate governance requires ensuring that the board of directors and the management have established appropriate organizational processes and corporate controls to measure and managing risk across the business. All businesses in a free market are exposed to risks which, while existing from inception, are becoming increasingly complex in so far as source of risk is not only getting wider but also changing rapidly. The Group risk management function aims to establish “a comprehensive and integrated risk management framework for managing company wide risk in order to maximise the company’s value” and to benefit the business in terms of improved performance, increased organizational effectiveness and better risk reporting.
Solidarity’s Strategy depends heavily on continuously strengthening its human resources, especially Bahraini resources, which in turn undergo development and training to meet with the firm’s vision and international standards. Solidarity currently boasts a diverse team of well trained and highly qualified professionals in all areas of practice – including insurance, finance, information technology, management, investment and law.

The group’s support to the insurance and takaful industry in the Kingdom of Bahrain and the region is represented in Solidarity’s continuous efforts to further develop the human capital by providing educational workshops primed to highlight the importance of management skills and its role in developing a solid ground for future economic development.

The Solidarity Group, with its recently established flagship subsidiaries -- Solidarity Family Takaful and Solidarity General Takaful -- in the Kingdom of Bahrain, is going to improve the quality of Islamic financing services not just in the Middle East but worldwide. Takaful Islamic Insurance Company in the Kingdom of Saudi Arabia and Solidarity Takaful SA in Luxemburg are part of our family. We also hold strategic shares in number of Takaful firms operating in the Sultanate of Oman, the Hashemite Kingdom of Jordan, Malaysia and the Kingdom of Saudi Arabia. The Company operations have included several strategic acquisitions, investments and large scale projects. The Company participated in the establishment of First Insurance Company (plc.) in Jordan, and MAA Takaful Berhad in Malaysia. The existing relationship with Al Madina Gulf Insurance Company in Oman was further enhanced by providing a higher level of technical and service support. In Saudi Arabia, Solidarity signed a Memorandum of Understanding with Saudi Shareholders to establish a new joint-venture cooperative insurance company. With a paid-up capital of approximately Saudi Riyals 555 million, this new company will offer a comprehensive range of Takaful products. By merging Solidarity’s industry experience and Saudi Shareholders local market knowledge, this new venture aims to tap the growing demand in Saudi Arabia for takaful products and services. In addition, Solidarity has already obtained a preliminary license to commence its operations in the Arab Republic of Egypt. Solidarity has also applied to the appropriate regulatory authorities in UAE to establish takaful operations, while in Qatar; the Company is seeking a licence to operate within the Qatar Financial Centre. Together with its subsidiary in Luxemburg, Takaful SA, the Company now has a presence, either existing or in progress, in nine countries around the world. This is expected to increase in the next few years, as Solidarity continues to grow its global footprint through both organic and inorganic growth.
Solidarity, being a takaful group, maintains separate books of accounts for Shareholders and Policyholders transactions. The financial statements are prepared in accordance with Financial Accounting standards issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and International Financial Reporting Standards (IFRS).