Pru Life UK to pioneer local Islamic insurance by April
Pru Life UK is targeting to roll out the country’s first-ever Shari’ah-compliant insurance product in April, with the upcoming takaful offering likely to be sold at affordable prices to make it more attractive.
“I won’t give a specific date because we are still waiting for the product to be approved by the Insurance Commission. But my understanding is we are very, very close to it,” Sanjay Chakrabarty, company president and CEO, told reporters on Monday.
“Without giving a specific date I would think sometime in April we should be able to roll out the product itself,’ Chakrabarty added.
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 profit as well as losses of the investment pool. 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.
When the company announced the product in November last year, Pru Life UK had said the takaful offering would address the long-standing demand for Shari’ah-compliant insurance in the country.
At the same time, the new product is aimed at enhancing financial inclusion for over 7 million Muslim Filipinos. It also aims to support the government’s efforts to promote and develop Islamic finance in the country.
For his part, Francis Ortega, company chief financial officer, said Pru Life UK’s upcoming takaful product would be affordable to many households.
“What we are working for is an individual life product for the household clients,” Ortega said.
“So that will be our initial focus and we’re bringing down the minimum payment to a micro level so it might be considered as microinsurance,” he added.
To establish its takaful operations in the Philippines, Pru Life UK worked with its Prudential affiliates in Malaysia and Indonesia.
The company also developed “comprehensive training programs” for its selected agents to equip them with in-depth knowledge of takaful principles.
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