The Role of International Insurance Companies in the

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

Contents § 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 2

FWU’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. » Custo mer Dema nd Dr iven 3

FWU-GROUP‘s Core Business Competencies Bancassurance - Asset Management - Factoring Germany Luxembourg Austria Italy France Saudi Arabia United Arab Emirates Kuwait Pakistan Malaysia The group is well positioned to meet the life assurance, investment and pension needs of institutional and private clients in Europe, Middle East and Asia with state of the art bancassurance & Shari‘a compliant Life products. 4

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

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

Contents § 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 7

FWU Group‘s international Bank distribution and Strategic product partners Bank Distribution Partners Al Safat Takaful Company Kuwait § FWU's existing distribution partners include: NCB in KSA and ADCB in UAE Bank Customers EFU Life Insurance Pakistan Aman Insurance UAE Takaful Ikhlas Malaysia Al Ahli Takaful Company KSA § Product administration, and claims management § Customer statements § Financial accounting § Filing with local regulatory authorities Bank is Custodian of all customer funds in the Savings Plan Local Life Insurance Product Partner FWU Int. Network Dubai, KL & Luxembourg § 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 8

Contents § 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 9

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

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

Cumulative Bank Income over a 5 year period 12

Contents § 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 13

Structured Asset Management Approach üAgreed funds target universe üObjective Investment process FWU’s fund selection and allocation model üOverweights the winners & underweights the losers üEnhance return by 15% to 25% p. a 14

FWU‘s Dynamic Fund Selection and Allocation Model 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. 15

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

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

Investment Advantages of Pooling Conservative portfolio Balanced portfolio 25: 75 50: 50 Custodian Bank Equity Pool Growth portfolio Dynamic portfolio 80: 20 0 -100 Cash Equivalent Pool Direct Investment in: § Sukuk § Murabaha § Trade-Finance 18

Contents § 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 19

The value added – why FWU Group ENTREPRENEURIAL INNOVATION PARTNER ü Customised product design ü Product training and sales support ü Sophisticated Point of Sale and Administration System ü Dynamic funds select and allocation model ü Business simulation model ü Cost efficient Agency structure ü Regional service hubs ü Unique Retakaful arrangement 20

Contents § 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 21

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

Contents § 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 23

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

FWU 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 reinsurer, 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. 25

Contact Mr. 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 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. 26