How Takaful Works
Takaful, is derived from the Arabic root word Kafala meaning “mutual guarantee”. It is an Islamic system of mutual cooperation, built around the concept of “Tabarru” (voluntary contributions). When a customer purchases a Takaful policy, he/she becomes a participant, paying a contribution that is pooled under one Takaful fund. This creates a pool of wealth for the common good of members and contributions are paid out in the event of a loss or misfortune. In addition, contributions are invested according to the principals of Shari’ah law (avoiding any interest-based instruments). In the event that an underwriting surplus is declared, it can be distributed in the following ways: to participants, donated to charity or placed in a reserve fund.
This is contrary to conventional insurance where policyholders pay premiums for protection against loss. If a loss occurs, the policyholder will be protected; if not, the policyholder will still contribute the full premium paid to the insurance company. What’s more is that the Shari’ah Advisory Board ensures that all products and services offered by Bryte are fully compliant with the principles of Shari’ah law. The Board also reviews and oversees all potential new product offerings in line with industry trends and customer expectations.
Innovation and Personalisation
In today’s fast-paced digital economy, customers expect to access information instantaneously. The Takaful app allows users to lodge and track claims, view and change cover, upload vehicle photos after an accident and press an “SOS” or panic button in the event of an emergency. Looking ahead, the Takaful product has strong growth drivers within the market, encouraging financial inclusion and enhancing insurance penetration. Its transparency, integrity and financial model has wider customer appeal and, as such, is open to all potential participants. Bryte will continue to anticipate, and respond to, market and community needs and requirements in order to provide innovative, tailored cover and solutions.
Keen to add this offering to your portfolio? Email Umair Jassat at email@example.com.