Why Takaful is the Next Best Thing to Happen in PH’s Insurance Industry
Throughout the years, the insurance sector in the Philippines has been continuously developing, which is a reflection of larger economic developments and the shifting requirements of consumers. This is something that Etiqa Philippines, which is one of the most prominent brands in the insurance industry in the nation, is well aware of, which is why it has been making every effort to facilitate the introduction of Takaful to the country.
Takaful is a financial model that is both distinctive and ethical, and it is founded on the ideas of social solidarity, shared responsibility, and mutual cooperation. The concept is based on Shariah law, which places an emphasis on fairness, openness, and ethical investment. This distinguishes it from traditional methods of insurance. The term “Takaful” originates from the Arabic word “kafala” or “kafalat,” which means to ensure or take care of one another. Takaful functions as a cooperative organization in which participants pay to a pool of funds. These money are subsequently put to use in order to provide assistance to members of the group who are experiencing difficulties, so exemplifying the concept of collective care.
How Takaful Works
People who take part in Takaful put a set amount of money into a pool of funds that everyone shares. This is called a donation. A Takaful Operator is in charge of this fund. Their job is to make sure that the money is handled properly, evaluate risks, and pay out claims. Takaful is different because of its moral basis. It tightly forbids investments in industries that are seen as bad or unethical, like tobacco, gambling, and alcohol. Instead, it focuses on businesses that follow Environmental, Social, and Governance (ESG) standards. This makes sure that your money is invested in a way that is ethical and in line with your beliefs.
One of the best things about Takaful is how it works and what its ideals are. Any extra money left over after claims are paid and costs are taken out is shared among members. This builds community and ensures everyone’s financial well-being. Takaful is more than just an insurance policy because of this system of shared risk and shared reward. It is a community-based program that encourages everyone to have access to money and help each other.
Takaful is popular not only because it follows Islamic rules, but also because it treats everyone equally, which appeals to people of all religions and backgrounds.
Etiqa: the Ethical and Expert Proponent of Takaful
Etiqa, which is part of the Maybank Group, is a big player in ASEAN. It has strong operations in Malaysia, Singapore, the Philippines, Cambodia, and Indonesia, and it provides a wide range of life and general insurance products, such as Takaful plans. Etiqa is known as one of the most forward-thinking insurance companies. It was one of the first companies to promote Takaful in Malaysia and is now taking its knowledge to the Philippines.
Spread across Southeast Asia, Etiqa has a strong name for fast, reliable, and customer-focused services. It has been called the biggest local insurer in Malaysia, the biggest player in Bancassurance (with a 21.1% market share based on Annualized Premium Equivalent), the biggest player in General Takaful, and the biggest player in both General Insurance and Takaful online (with a 53.1% market share).
Etiqa Life and General Assurance Philippines, Inc. has been in the group insurance business in the Philippines for more than 60 years. It began as Star Life Insurance in 1958 and later changed its name to AsianLife. One of Asia’s biggest bank groups, Maybank, bought shares in AsianLife in 2015. In 2019, it changed its name to Etiqa Philippines to match its parent company, Etiqa International Holdings Malaysia, which is a Maybank investment holding business. Kuala Lumpur, Malaysia, is where our main office is based.
Why Takaful Makes Sense for the Philippines
When Takaful comes to the Philippine market, it could change the local insurance business by giving people an option that encourages good financial habits and community-based support networks. Filipino ideals, like shared responsibility and mutual care, are reflected in takaful. This means that the product could appeal to both Muslims and people who are not Muslim.
Takaful’s focus on ethical investments fits with the growing need for financial goods that are in line with ESG standards. This makes Etiqa a leader in socially responsible insurance.
A Positive Outlook for Takaful in the Philippines
Takaful is not just about financial protection; it is but about fostering a community that supports each other through life’s uncertainties. Etiqa thinks that Filipinos stand to gain a lot from Takaful’s moral and cooperative approach to insurance. Etiqa strongly opines that Takaful has the potential to empower individuals, uplift communities, and contribute to the country’s progress by providing financial security that is rooted in shared values and ethical principles. Etiqa’s Takaful Insurance products will soon be available on Etiqa Philippines’ website, https://www.etiqa.com.ph, and select Cebuana Lhuillier stores nationwide.