Takaful takes root in the Philippines 

Pru Life UK is pioneering Shari’ah-compliant insurance in the Philippines as it secured from the Insurance Commission the first-ever takaful license in the country.

In a statement on Tuesday, Pru Life UK said the launch of its takaful business in the Philippines addresses the long-standing demand for Shari’ah-compliant insurance here.

Also, the launch is aimed at enhancing financial inclusion for over seven million Muslim Filipinos and supporting the government’s efforts to promote and develop Islamic finance in the country.

According to the United Kingdom-based Institute of Islamic Banking and Insurance, policyholders of takaful are joint investors with the insurance vendor, who acts as a manager or an entrepreneurial agent for the policyholders.

Further, the policyholders share in the investment pool’s profits as well as its losses. The Institute said a positive return on policies is not legally guaranteed, as any fixed profit guarantee would be akin to receiving interest and offend the prohibition against charged interest.

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“Our takaful launch will be a defining milestone not just for Pru Life UK but for the entire Philippine insurance sector,” said Sanjay Chakrabarty, president and chief executive officer of Pru Life UK.

To establish its takaful operations in the Philippines, Pru Life UK worked with its Prudential affiliates in Malaysia and Indonesia.