Takaful - Opportunity for Existing Insurance Customers to Switch

Takaful provides an opportunity for Muslims who currently use conventional insurance to move to a Shari’ah-compliant alternative without giving up the financial protection they need.

Some Muslims may already have conventional motor, medical, life, property, or business insurance because they need protection against financial loss. However, they may prefer an arrangement that is structured according to Shari’ah principles.

The availability of Takaful allows these customers to replace conventional insurance with products based on:

• Mutual assistance
• Risk sharing
• Tabarru’
• Shari’ah-compliant investments
• Proper separation of participants’ and shareholders’ funds
• Shari’ah governance

Example

Suppose Ahmad currently has conventional motor insurance because it is required and he needs protection for his vehicle.

If a suitable Motor Takaful product becomes available, Ahmad can switch from conventional insurance to Takaful while still receiving protection against covered motor risks.

Similarly:

Conventional life insurance → Family Takaful

Conventional medical insurance → Medical Takaful

Conventional property insurance → Property Takaful

This is important because Takaful does not only attract people who were previously uninsured. It can also convert existing insurance customers into Takaful participants.

Simple Idea

Already insured Muslim → Shari’ah-compliant Takaful becomes available → Switch to Takaful

Easy Formula

Existing Insurance Customers + Suitable Takaful Alternative = Potential Growth in Takaful Participation