Retailing Takaful Products Islamic Insurance

Takaful Islamic Insurance  Retailing Takaful Products Islamic Insurance

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This subsection considers different factors which may have an important impact on retailing takaful products.

Bancassurance and banca takaful
Islamic bancassurance, known as Banca takaful , means promotion, marketing and distribution of takaful products through Islamic banking channels. This is particularly important in order to attract Muslim and non-Muslim customers.

Takaful Islamic Insurance

There are several advantages and disadvantages of banca takaful for both banks and takaful operators. For example,banca takaful will help the banks to increase their range of products and thus increase their earning. It also helps them to establish a strong relationship with customers and better understanding of their needs. It also enables banks to combine and improve the products and consequently attract more customers. However, some drawbacks may occur due to the lack of a bank’s expertise in insurance and sometimes its complicated nature. Additionally, the relationship with customers may suffer due to negative claiming experiences. For the takaful operators, on the other hand,banca takaful widens the distribution of their products and consequently may lead to reduced costs and increases the competition with other providers. However, by shifting to bank distribution channels, the takaful operator may face the fact of the possibility of damaging the relationship with the traditional distribution channels which need to be considered carefully by the takaful manager (Rabiah Adawiah Engku Ali and Odierno, 2008).

Takaful Islamic Insurance

Promoting takaful and customer awareness. Promoting takaful products includes branding, marketing and advertising. Since insurance was an untouched topic for many years, many Muslims believe that insurance isHaram(prohibited). Therefore, strategies are needed to educate customers about the main principles of takaful , and create demand for such products (Bhatty, 2007a; Abdi, 2007).

Abdul Hamid and Othman (2009) studied the level of knowledge and awareness among Muslims towards takaful insurance and its terms and concepts in Malaysia. Based on 232 Muslim banking customers in Kuala Lumpur, they showed that there is a lack of awareness among Muslims about the main principles and elements of takaful , such as tabarru, ghararandmaysir. They also showed that about 75 per cent of respondents agreed with the use of Arabic terms in takaful in order to differentiate takaful products from conventional insurance. Conversely, Al Rasheedi (Anon, 2005) emphasised the importance of promoting a takaful concept worldwide without it being linked to religious beliefs, as he said:

We take into account the vital role and responsibility undertaken to promote the takaful concept throughout the world, especially in the developed world, to give a model example of Islamic economy and to introduce a new insurance branch based upon fairness, equality and cooperation. It is a concept that meets the community’s requirements without being linked to religious belief. It is indeed a civilized behaviour that is both commendable and worthy of gaining more ground to underline our Islamic identity (Anon, 2005).



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To cite this document:
Tahani Coolen-Maturi, (2013) "Islamic insurance (takaful): demand and supply in the UK", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 6 Issue: 2, pp.87-104, doi: 10.1108/17538391311329806.