A UAE-based regional financial product comparison platform has seen a surge in Takaful takeup on its platform, signaling a demand for Islamic insurance which has been facilitated by digital means.
Over a two-year period, Yallacompare’s Takaful sales conducted via its platform has managed to grab the lion’s share of its vehicle insurance sales segment, moving up from its minority position: Islamic schemes in 2020 accounted for 65% of its entire vehicle insurance sales portfolio, up from a mere 25% in 2018.
“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,” explained CFO Jonathan Rawling.
The data, based on over 200,000 car insurance sales transactions, have also shown other surprising trends.
“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,” Yallacompare noted.
Rawling thinks that this surge could be explained by two main factors: a standardization in regulations regarding cover and benefits under the Insurance Authority’s unified motor policies — both Islamic and conventional car insurance policies have to offer the same levels of mandatory cover; and Takaful operators being more proactive in widening their market foothold, outside of 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,” Rawling opined.
Broad as its definition and scope may be, essentially fintech serves the purpose of making financial services more accessible, meaning faster, cheaper and easier to obtain. By this justification, financial product and pricing comparison websites which have facilitated everyday consumers in their journey in securing and managing their finances in a more efficient manner through data and research provision are also fulfilling a much-needed fintech market need. Takaful operators and insurers, particularly driven by the COVID-19 pandemic, have stepped up their digital and insurtech capabilities to maintain and grow their market share. Like their banking counterparts, insurers have also turned to comparison websites to drive distribution and awareness.