Takaful is a type of Islamic insurance where members contribute to a pool system to guarantee each other
Dubai: In its most comprehensive analysis of customer data ever undertaken, Yallacompare, the number one finance site in the Middle East, has identified a significant increase in the number of site visitors choosing takaful-based vehicle insurance.
Figures show that in 2018, takaful sales made up just 25% of overall transactions. But last year, 2020, saw 65% of vehicle insurance sales based on takaful products.
Takaful is derived from the Arabic word ‘kafalah,’ meaning guaranteeing other, or joint guarantee. Members of a takaful scheme all pay into a pool, jointly insuring each other against loss or damage. Takaful insurance encompasses shared responsibility, joint indemnity, common interest and solidarity, and Arabic tribal culture.
The data pool garnered across the site’s customer sales activity helps unveil the patterns revealed by over 200,000 car insurance sales transactions and shows a clear shift towards takaful-based vehicle insurance.
Jonathan Rawling, CFO, Yallacompare, explains: “Our data dig into trends since 2017, allowing us a deep dive into consumer behavior, and enough data to be able to model potential future consumer behavior with a greater degree of confidence. One aspect of the data we didn’t necessarily predict is the large uptake in takaful-based vehicle insurance, compared to conventional insurance.”
The meteoric rise in takaful sales does not seem to be driven by changes in customer demographics. While we might expect customers from Muslim nations to favor takaful and customers from Europe and the subcontinent to favor conventional insurance, this is not what the underlying data shows us: 70% of Indians favored takaful over conventional products, compared to 56% of Emiratis and 57% of Saudi nationals.
Jonathan Rawling explains: “We believe the large uptick in takaful sales in the last two years is down to several factors. Firstly, there has been a ‘standardization’ in the rules regarding cover and benefits under the Insurance Authority’s unified motor policy. This means that all car insurance policies, be they takaful or conventional, offer the same levels of mandatory cover.’’
“Secondly, and much more significantly, takaful providers are increasingly looking to acquire customers from outside their traditional base. Takaful providers are more interested in customer acquisition and now target customers from right across the spectrum of nationality and religion. This represents a win for consumers - more firms bidding for their business means more choice and better products and prices.”
About Yallacompare
Yallacompare is the Middle East's leading comparison site by employee count and share of online insurance sales. Using its platform, consumers can compare and buy insurance policies online and apply for bank accounts, credit cards, loans, cars, and more in nine markets across the MENA region. Additionally, Yallacompare is committed to bringing more transparency to the region’s finance industry and actively educating users so that financial literacy can be improved across the Middle East.
For media inquiries: media@mail.yallacompare.com
© Press Release 2021
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
