Day two of the Dubai World Insurance Congress 2020 opens with a panel session on Takaful, and whether the industry needs to be more ambitious in its goals
The take up of Takaful products has been slow, but what is stopping more customers from choosing Takaful as an alternative to insurance? The Takaful panel session at DWIC 2020 looks to have the answer.
Frederik Bisbjerg, chief digital acceleration officer at Noor Takaful, says the issue is with the fundamental perception of insurance outside of the industry.
“I believe the root cause is the fact that no-one really wants to buy insurance – it’s a product that in most cases you are forced to buy and that you hope you’ll never need,” he says. “That itself is a problem that is amplified by the fact that Takaful is a very uncommon term for non-Muslims, who tend to stick with what they know.”
Meanwhile, fellow panellist Ajmal Bhatty, managing partner at Masses Global, says more needs to be done to improve understanding of the product.
“I think [the lack of uptake] is because when Takaful’s ethical and cooperative dimensions are not properly understood, nor delivered, it is taken to be exactly the same as insurance,” he says. “The application of traditional insurance culture and legacy systems have contributed to this indifference, but modern technological advances give us the opportunity in making Takaful the real disruptors driven by its own Takaful culture and its distinct ethical and cooperative appeal”.
Aman Insurance chief executive Jihad Faitrouni agrees: “The demand for Takaful needs to be enhanced by educating and promoting Takaful basic concepts and differentiating from the conventional market in comparison with Conventional Insurance Companies.”
And GAIF secretary general Chakib Abouziad says more needs to be done to take Takaful products back to its original value proposition.
“The concept of Takaful in the MENA region has deviated from its original value proposition to become almost a standard offer with limited compliance,” he says. “Few companies are meeting their promise to distribute the surplus, while shareholders are proceeding to dividends distribution.
“The concept is not properly explained and promoted, and professionals should be educated to make sure they have the Takaful Mindset and act in compliance with its principles and rules.”