Pru Life UK launched the country’s first Islamic insurance lto provide financial inclusivity to many Muslim Filipinos and support the government’s goals to develop Islamic financing.
Takaful, which means joint guarantee, is a Shari’ah-compliant insurance recently approved by the Insurance Commission to fill in the long-standing gap in Muslim finance.
Its launch was announced on Monday, Nov. 4, as a way to provide insurance to seven million Muslims, as well as non-Muslims in the country, while adhering to the rules and principles of Shari'ah.
Sanjay Chakrabarty, president and chief executive officer of Pru Life UK believed that Takaful has been a milestone for both the company and the Philippine insurance sector, given that Islam is the second-largest religion in the country.
“We are honored to be at the forefront of this significant development to bring Shari’ah-compliant financial protection solutions for the first time. With Prudential’s regional expertise and our commitment to inclusivity, we aim to set new standards for financial protection that resonate with every Filipino, regardless of their faith,” he said.
Chakrabarty told reporters that the company is planning to offer the insurance product sometime next year, focusing on savings and protection. This, however, is still subject to regulatory approval.
“It’s not just about the launch of the product. There’s an element of getting the agents educated as well. We’re talking about three to four thousand agents who get trained to sell Takaful products. We have to make sure they understand the principles before we allow them to sell this,” he emphasized.
When asked if there would be any difference in premiums, Chakrabarty said that Takaful would have a more affordable contribution term, stating “That is one of the key factors here. We’re trying to penetrate a community that has been traditionally underserved, and financial literacy is poor… We have to take these factors into account and we have to give simple and easy-to-understand products.”
While the future of Islamic insurance looks bright, the Pru Life UK chief stated financial literacy as one of the possible hurdles that would slow the product’s growth.
Because of this, there have been initiatives to hold information drives in areas such as the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and the Zamboanga Peninsula to promote financial education and economic empowerment.
“With close to seven million Muslims residing in the Philippines, primarily in regions such as BARMM and the Zamboanga Peninsula, where many remain without bank accounts or uninsured, this initiative has the potential to transform the landscape of financial services in these communities,” Pru Life UK said.