Denmark-based TIA Technology A/S's agship product TIA Solution, which provides a complete solution for insurers from planning and marketing activities to claims handling, is a proven success as far as conventional insurance is concerned. In a brief meeting with Islamic Finance news, TIA Technology CEO Morten B Steiner (above, right) said that it is set to rock the Islamic insurance industry in the third quarter of 2008, when it will launch the new TIA Takaful Solutions.
He said TIA Solution, which has been implemented in 45 insurance companies across 20 countries, helps insurers lower their total operational costs, having demonstrated an increase in efficiency of 20% to 30% as compared to companies using old systems. TIA Takaful Solutions is expected to do the same for Islamic insurance operators. This is made possible with the agreement it signed with Malaysian based PAC Total Solutions (PTS), which allows PTS to customize TIA Solution according to the requirements of insurance companies in Malaysia and Asia, and it will be extended to the formulation of the Takaful solution as well. Below, Steiner and Eric Loo (above, left), CEO of PTS, elaborate on their plans.
Earlier, you mentioned developing TIA Takaful Solution. Will being in Malaysia, where Islamic nance industry growth is said to be encouraging, help you realize the plan? Loo: We plan to market TIA Takaful Solutions throughout the world, not only in Malaysia. But we are happy that we are in Malaysia because the country seems to be setting some sort of a benchmark (in the area of Islamic nance). I believe it is ideal for TIA Takaful Solution to originate here.
TIA Solution is focused on the European region but we cannot neglect the fact that global Takaful is rising. We have some reports and statistics indicating the next big thing is Takaful. Therefore, it is only right for TIA to produce and release a TIA Takaful system. So, when is TIA Takaful Solution likely to materialize?
TIA is scheduled to be released by the third quarter next year. This system is different from other types of Takaful because it is created in a Takaful insurance environment. we are using an actual insurance company's environment to create the system. So, we are not producing it in a software company (like other products) but an actual Takaful company where we can adapt, create and develop a reliable system. What other efforts are expected to play a bigger role in the Islamic nance market? Are you looking at more research and marketing? Loo: Our research on the market is ongoing. Marketing is also in the planning stages. But instead of pushing the industry, it is the industry
that is pushing us to be faster. Many companies have shown interest in TIA Takaful Solutions.
This is because TIA Solution for the conventional insurance has proven to be a system of good quality. So, that's why they want to see TIA Takaful launched as soon as possible. As a result, we are doing our best to put in the R&D, provide an encouraging environment and the necessary investment so that we can deliver a good system. So, TIA Takaful will be launched in Malaysia rst? Loo: I believe that we will take a global strategy in introducing TIA Takaful. TIA Technology will introduce it in Europe while we focus on Asia, which includes the GCC. But we plan to launch it simultaneously in the two continents. Mr Steiner, the Islamic nance market in Europe is still in its infancy.
How do you think your company will fare with TIA Takaful Solution there? Steiner: We are excited about the partnership with PTS, and view the opportunity in the Asian market as interesting. After the partnership which allows us to work on providing solutions to conventional market, we decided to develop a Takaful version jointly with PTS.
We don't know what is required for Takaful solution, so we believe that this is an excellent opportunity to work with PTS in Malaysia, where there are experts to guide us on developing a suitable solution. We have conducted initial investigations with some Takaful experts to see if it is possible for the current con gurable solutions to be added on to the Takaful. This is because TIA Solution for the conventional insurance has proven to be a system of good quality. So, that's why they want to see TIA Takaful launched as soon as possible. As a result, we are doing our best to put in the R&D, provide an encouraging environment and the necessary investment so that we can deliver a good system. So, TIA Takaful will be launched in Malaysia rst? Loo: I believe that we will take a global strategy in introducing TIA Takaful. TIA Technology will introduce it in Europe while we focus on Asia, which includes the GCC. But we plan to launch it simultaneously in the two continents. Mr Steiner, the Islamic nance market in Europe is still in its infancy.
How do you think your company will fare with TIA Takaful Solution there? Steiner: We are excited about the partnership with PTS, and view the opportunity in the Asian market as interesting. After the partnership which allows us to work on providing solutions to conventional market, we decided to develop a Takaful version jointly with PTS.
We don't know what is required for Takaful solution, so we believe that this is an excellent opportunity to work with PTS in Malaysia, where there are experts to guide us on developing a suitable solution. We have conducted initial investigations with some Takaful experts to see if it is possible for the current con gurable solutions to be added on to the Takaful.
As for Europe, yes, it (the Islamic insurance market) is still small. The discussion on Takaful solution is just beginning there and the market is not as mature as the one in Asia. But our main focus is to get the best Takaful solutions for the Malaysian and Asian markets. Then when we have that, we will learn how to deal with Takaful. When
the European market matures, we will be ready to deal with the situation. As Eric said, there will be a global launch but the main focus will be on the Asian market, where the demand is clearly formulated. So, it is something new for your company? Steiner: Yes, it is, and that is what makes us excited. What were the challenges in coming up with the Takaful solution? I think the challenging and interesting thing is to understand the concept of Takaful, which is non-interest accrued insurance. We have held massive discussions to nd out how the concept will affect our solutions and have come up with ideas on how we want to implement those concepts as our structure in the basic system because our
System is con gurable, so that we can con gure our solutions to conform with the Takaful requirement. But we want to make it in a quality manner, so that is why we are launching in the third quarter of next year. As you know, there are quite a few solutions providers so apart from the fact that your solutions will be based on an actual corporate environment, what other features of your product stand out? Loo: First, we know our competitors. We also know the berth of the system which is designed at the software company. Our rst advantage is that the TIA core solution, which is available now, is already developed.
From that, we add Takaful. So, we are a step ahead of other companies. Steiner: I would also like to emphasize that when TIA is sold, we not only sell a standard solution that works now but we also sell a commitment that we will upgrade the solution. Like our conventional customers, we give equal commitment to our Takaful solution customers that they will not only have the advantage of a global standard package but the product can be upgraded with new features and functions within Takaful solutions. So they get the best of two worlds. How will cooperation between the two companies assist in the growth of the Islamic nance industry in terms of being a solutions provider? Steiner:
We would never have dreamt of doing Takaful as we don't have the basic information. We know the system, the conventional insurance and how to modify things. But we could not have made it without the help of PTS, which has a lot of employees who are aware of Takaful requirements. So, basically, right now, we have TIA and PTS together nding out how to develop the system in the most efficient way. I know that will take time but this unique combination will enable us to provide better technology solutions for Takaful companies, and I believe the product will be a leading one worldwide.
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