Firms bid for Islamic insurance
An Amana Bank branch in Dar es Salaam. The bank offers sharia-compliant financial products and services. The introduction of Takaful, a type of Islamic insurance, is expected to promote banking activities. PHOTO | FILE
What you need to know:
- Three insurance companies have submitted proposal of open Islamic Insurance whereby currently the Tanzania Insurance Regulatory Authority (Tira) is going through see the applications see if the companies meet the criteria.
Dar es Salaam. Tanzania will soon start offering Islamic insurance services, after three companies submitted their application for licensing.
The companies, which are wholly owned by Tanzanian investors, submitted their applications to the Tanzania Insurance Regulatory Authority (Tira).
They include Takaful, a type of Islamic insurance in which members contribute money into a pool system in order to guarantee each other against loss or damage.
Takaful-branded insurance is based on sharia, Islamic religious law, and explains how it is the responsibility of individuals to cooperate and protect each other.
According to a report by Ernst & Young, the global Takaful market was estimated at $15 billion by 2018.
The companies which have submitted requests to the regulator for approval include Azam, Zanzibar Insurance and Mo Assurance.
Speaking with The Citizen yesterday, the Commissioner for Insurance, Dr Bhagayo Saqware, said the demand for insurance products that are based on people’s daily norms is increasing. He added that the regulator was currently going through the three application documents to see if they had met the criteria.
The introduction of Islamic insurance follows the implementation of a regulations framework.
Bankers say the introduction of Islamic insurance will enable the growth of Islamic banking, as the absence of Takaful was limiting banks from investing in the niche.
“Countries like Morocco, South Africa and Kenya have introduced the product and are performing well. The insurance has to be inclusive regardless of their religion, but it will be based on Islamic religion,” he said.
Dr Saqware said the regulator welcomed other companies to look into the possibility of introducing the product, saying it would help to increase insurance penetration.
“The requirement for registering an insurance company offering Takaful products will follow the same capital and professional requirements as others; however the emphasis will be placed on operational knowledge based on Islamic sharia,” he said.
