PRU Life Insurance Corp. of UK Philippines (Pru Life UK) targets to launch its first takaful insurance product in the first quarter of 2025 as it has secured a license from the Insurance Commission (IC).
“So today, what we launched was the takaful window, which is essentially an endorsement of the platform we had put together, how our Shari’ah committee should look like, what are the tenets of takaful, and how the investment of the premiums we collect should look like. Essentially, the infrastructure, the foundation that allows for the product to be launched,” Pru Life UK Philippines President and Chief Executive Officer Sanjay Chakrabarty told reporters late on Monday.
“And we expect to launch the product in quarter one of 2025. Of course, it’s subject to regulatory approval,” he added.
Takaful is a type of Islamic insurance where members contribute a certain sum of money to a common pool. Takaful insurance needs to be compliant with Shari’ah law, which prohibits riba (interest), al-maisir (gambling), and al-gharar (uncertainty) principles.
Mr. Chakrabarty said that the products they plan to release will focus on savings and protection.
“The market is ready for the takaful product. The number of people whom this would directly impact is not small — seven million is not small — but the way we are structuring this business line is not just restricted to the seven million,” he said, referring to the Muslim community in the Philippines.
“It’s got a much wider set of potential customers that we’re looking at… If the product is strong with a good value proposition for the customer, it will appeal to everybody. It will not be restricted to the Muslims alone,” Mr. Chakrabarty added.
Pru Life UK said it has formed a Shari’ah Committee to oversee the creation of takaful products.
Mr. Chakrabarty added that their agents will need to be trained to understand and sell takaful products, with their target market also needing to be educated about the need for insurance.
“We try and make sure that all the segments, all the communities that are unserved or underserved, do get addressed by us. We will have a significant increase in customer base, I hope,” he said.
He added that they expect that tapping the Muslim community will contribute to the company’s profitability in the long term.
“There are businesses that have a really long cycle. Insurance is one of them. So, if we do our jobs correctly, if we set up the products right, then at some point, we do expect this to start contributing to the profitability of Pru Life UK,” he said.
“If you understand the insurance business and you understand the long cycle that this business operates with, then you will not expect to see a huge profit coming through in 2025 or 2026. This is a long-term commitment to this community and to this line of business. So, over time, yes, it will contribute because that’s how a business becomes sustainable.”
Pru Life UK will conduct sessions on financial literacy and economic empowerment in areas with large Muslim Filipino populations like the Bangsamoro Autonomous Region in Muslim Mindanao and the Zamboanga Peninsula, he said.
Mr. Chakrabarty added that takaful products will need to be affordable to help boost the insurance penetration rate.
Pru Life UK has over 170 branches and general agency offices in the Philippines, with a life insurance agency force of more than 38,000 licensed agents.
It booked a premium income of P46.19 billion and a net income of P4.36 billion in 2023, IC data showed. — Aaron Michael C. Sy