Sharia products for insurer Union

New Sharia-compliant products are part of a strategy which Ajman-based Union Insurance Company hopes will boost revenue this year.

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The Union Insurance Company expects revenue to increase by 32 per cent this year through the introduction of Sharia-compliant products.

The company, based in Ajman and listed on the Abu Dhabi Securities Exchange (ADX), said it would introduce Islamic insurance products, known as takaful, this year.

"This company will become an Islamic insurance company, therefore we expect a lot of business from the market," said Dharmasiri Edirisinghe, the finance manager at Union Insurance.

Mr Edirisinghe confirmed a statement posted on the ADX website, which forecast a 32 per cent rise in revenue this year.

"We have an expansion programme … We are hunting for new business, therefore we expect 32 per cent growth," Mr Edirisinghe said.

He said an announcement concerning the new Sharia-compliant products would be made "in the near future", adding that the launch would be accompanied by a marketing drive.

According to the statement to the ADX, the board of Union Insurance had agreed on a 7 per cent increase in administration costs for this year.

This increase is due in part to the company's plan to convert to a Sharia-compliant insurance system. For this purpose, the board has shortlisted candidates for a planned Sharia committee, the statement said.

An update of the company's IT infrastructure will also contribute to the increase in administration costs. The board approved a plan to upgrade its PREMIA insurance software by the IT firm 3i Infotech, at a cost of Dh581,440 (US$158,296), according to the statement.

The company's board has approved the creation of two units to invest in commercial and property projects, the statement said. It said the board also assigned a committee to draw up a plan to invest no less than 30 per cent of the investment portfolio in bonds issued in Abu Dhabi.