Eric van Biesen
Takaud to launch private pension products
Dubai, September 12, 2012
Bahrain-based Takaud Savings and Pensions aims to launch its initial pension product in the fourth quarter of this year, becoming the first Gulf-based private pension provider, its chief executive said.
Takaud, which received regulatory approval to operate in Bahrain last September, says it aims to meet growing demand for low-risk and long-term pension products across the Mena region.
The firm, wholly owned by Kuwait Projects Company (Kipco), a major regional investment house, plans to offer its first corporate pension plan in the fourth quarter of 2012 and products for individuals in the first quarter of 2013.
"We will launch in Bahrain this year, followed by Kuwait and Jordan early next year," chief executive Abdallah Kubursi said on Wednesday. "We aim to expand across the Mena region in nine different countries over the next four years."
Kubursi, who joined Takaud in 2011 from ACE Life, forecasts $1 billion in assets under management within the next five years, and projects Takaud will break even by the fourth year of operations.
Takaud has 12 staff and the number will increase to 15 by year-end. Last month the firm appointed its chief finacial officer, Eric van Biesen, previously with Libano-Suisse Insurance.
"Growing middle classes, increasing levels of awareness, demographic and changing cultural environments are powerful drivers of demand for long-term savings and private pensions products," Kubursi said.
"We have plans in place to launch Egypt, Saudi Arabia, Algeria, Tunisia and the UAE (United Arab Emirates) over the course of the following years. Whilst challenging, we firmly believe the target expansion plans are achievable."
Egypt, Saudi Arabia and Algeria will eventually account for most of Takaud's business, Kubursi said.
Product distribution will be split between a direct-to-consumer model, intermediaries and partnerships with firms that sell similar or compatible products. Takaud plans to build business relationships with other members of the KIPCO group, for distribution purposes or to provide them with savings products for their employees.
Ageing populations across the Middle East are expected to put pressure on government retirement schemes, creating a need for private products to complement them, Takaud argues.
The population over the age of 65 in Gulf Cooperation Council countries - Saudi Arabia, the UAE, Kuwait, Oman, Qatar and Bahrain - is forecast to grow by 94 percent in the 2010-2020 period to approximately 1.9 million, according to the United Nations Department of Economic and Social Affairs.
That would represent 3.7 percent of the total GCC population in 2020, and the ratio is expected to increase to 18 percent by 2050, UN data shows.
"When we look across to what is happening in some of the wealthiest countries in the world, you do get some insight into the challenges we could face in the future, and these are becoming more apparent in our market," Kubursi said. – Reuters