Aiming to increase the penetration of the Takaful sector in Indonesia, Asuransi Takaful Keluarga has launched Indonesia’s first digital-based Waqf insurance product or Waqf insurtech (insurance technology).
Launched on the 28th May 2021, Asuransi Takaful Keluarga collaborated with the Indonesian Waqf Education Foundation to launch the country’s first Waqf insurtech comprising term life insurance products and personal accident products.
“The Waqf insurtech product includes term life insurance products and personal accident products with an entry age limit of 17 to 55 years old,”said Arfandi Arief, the president director of Asuransi Takaful Keluarga.
Takaful Keluarga hopes to increase the penetration of Waqf charity based on the Iltizam Al-Tabarru’ concept through digital platforms in a bid to encourage the development of Indonesia’s Shariah economy.
“We are looking to present Waqf solutions using the benefits of Shariah insurance via a digital platform that is easily accessible anywhere and at any time.
“With an affordable contribution, this product also helps people optimize the value of their Waqf contribution beyond the money deposited,” said Arfandi.
Insurtech products in Indonesia are gaining prominence and insurance players hope that the presence of insurtech will encourage insurance penetration in the country.
Taking a look at Indonesia’s Takaful sector, data from the Financial Services Authority, or Otoritas Jasa Keuangan, indicated that the gross contribution of Takaful as of November 2020 stood at IDR15.37 trillion (US$1.08 billion), marking a 6.4% increase compared with IDR14.45 trillion (US$1.01 billion) recorded as of November 2019.
However, the gross contribution of General Takaful experienced an 11.18% decrease in the same period of 2020 to IDR1.43 trillion (US$100.18 million) compared with IDR1.61 trillion (US$112.79 million) in 2019.
The long-term growth potential of the Takaful sector is high, as Indonesia’s life insurance penetration is low — it totaled 1.4% in 2019 — and the country has the largest Muslim population in the world, according to Fitch Ratings. Data by the rating agency also indicated that around 20% of Takaful products in Indonesia are distributed through bancassurance.
Asuransi Takaful Keluarga’s debut product has a minimum contribution amount of IDR400,000 (US$28.02) per year. Of the total insurance benefits provided, 45% will be donated to Waqf management bodies which have been officially registered with the Indonesian Waqf Board.