Takaful Insurance: Customer interest is displayed - Eco Life

Takaful Insurance: Customer interest is displayed – Eco Life

Banks face a reluctance to refuse insurance. They strive to cover the current financing stock. Financial education and mainstreaming efforts are important.

More than 4 years after the launch of participating banks, Takaful insurance has finally entered the market. Currently, 6 participating banks have received approvals to offer Takaful insurance products. Thus, Takaful insurance operations, the subject of approvals obtained by the company at the beginning of the year by ACAPS, are related to life and death insurance, bodily accident risk insurance operations, fire and natural element insurance operations, and glass breakage insurance operations. Water damage insurance and takaful investment.

Once launched, interest was noticed on the part of clients who had already secured financing, aiming to insure their property. However, there are still rebels, mentioned the directors of the participating banks who were contacted, despite having previously signed a commitment, while contracting for financing, stipulating to subscribe to the insurance contract as of its entry into force. The reason for their reluctance is the surplus associated with the cost which they are not willing to bear. Faced with this, banks have no choice but to negotiate with their customers to get them to sign up. In addition, if some come on their own to join these insurances, it is necessary to lend a helping hand to others. Moreover, for some banks, it worked well before getting approvals to prepare clients for insurance on their properties. In any case, the pace of subscriptions is progressing, in accordance with the goals set by the banks. According to Youssef Al-Baghdadi, Chairman of the Board of Directors of Al-Safa Bank, “We are even ahead of our goals. In two to three months, we would have sold stock for underwriting. At the moment, a hundred customers have responded.. This means that the missing link to crowdfunding is complete. The current emergency situation for banks is to cover the funding already granted. Then comes the stage related to the generalization of death/disability coverage for people, without contracting in advance financing.” Hakim Bensaïd, president of the Moroccan Association of Participatory Financial Professionals (AMFP), explains. Add: “Once these steps are successfully completed, banks should start commercializing multi-risk building insurance and, ultimately, savings and investing.”.

It is necessary to know that the customer, like the traditional system, is not necessarily obligated to subscribe to a takaful, to the insurance company of the bank from which he obtained the financing of his property. He can go to another company and get insurance he sees fit. The important thing is to cover yourself and your acquisition.

Ultimately, banks must use this insurance to put it into new products, including customer financing. unless “This can only be done if these unexpected rewards are large enough to allow it,” Mr. Bin Said thought. In the meantime, the Agency by Investment remains the main vehicle for the refinancing of the participating banks with an amount of 2 billion dirhams. The biggest challenge for banks is to attract more customers, to ensure more deposits and demand investments, in order to have more resources. This, given that in the system of conventional banks, the latter constitute more than 70% of their sources of refinancing “, Our professional explains. In addition, the participatory ecosystem, for its completeness, needs to establish a capital market, with Sharia-compliant sukuk and equity index, as well as an interbank participation market. All this can only contribute to finding alternative sources of refinancing the agency with investment. Beside that, “Efforts should be made regarding financial education of future clients, popularization of this new system and human resource training,” Mr. Bin Said concludes.

Crowdfunding is still on the rise

Participation banking activity is still on track, especially on the financing side. At the end of May, premium crowdfunding reached 21 billion dirhams, an increase of 8.7% since the beginning of the year. The largest share still goes to real estate murabaha with 83.5%, with an increase of 7.5% to 17.5 billion dirhams. Consumer financing increased 2.5% to AED 1.2 billion and equipment financing increased 21% to just over AED 2 billion. On the other hand, demand deposits showed an improvement of 10.4% to reach nearly 6 billion dirhams, compared to a growth of 14.6% in investment deposits to reach 2 billion dirhams.

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