Pru Life UK, one of only two insurance companies with a Takaful operator license from the Insurance Commission (IC), is preparing to introduce the first Islamic insurance system in the Philippines.
Pru Life UK president and CEO Sanjay Chakrabarty stated that the company is awaiting final approval from the IC before offering the product to clients. He expressed hope that approval would be granted by April.
“We are the first to receive the license, and we have made tremendous progress in this field. Now, we truly hope that when we roll it out, we will be able to drive penetration in one of the most underserved areas of the country,” Chakrabarty said.
Takaful is an Islamic insurance system based on Sharia law. Unlike conventional insurance, where premiums are paid to an insurer, Takaful members contribute to a pooled fund to mutually guarantee each other against loss or damage. A Takaful contract specifies the risks covered and the duration of coverage, similar to a traditional insurance agreement.
“We are almost ready to roll out the product. What we had in November was the approval for the Takaful window,” Chakrabarty said. “I think the potential is significant. There are seven million Muslims in the country who we believe should be able to access this product. But we also believe that, given the strength of this product, it may not be limited to just those seven million Muslims.”
IC commissioner Reynaldo Regalado described the introduction of Takaful in the country as a “trailblazing step toward financial inclusivity.”
To support its launch, Pru Life UK has signed a distribution agreement with Al Amanah Islamic Investment Bank of the Philippines, the country’s only Islamic bank.
“As we continue our journey of providing accessible and relevant insurance solutions to more customers, we look forward to strategic partnerships that will expand our reach, as well as innovative, targeted products and enhanced services,” Chakrabarty added.
Pru Life UK, a subsidiary of Prudential Plc, was established in the Philippines in 1996. It launched Variable Universal Life Insurance (VUL) in 2002, a product that helped position the company among the country’s top insurers.
“In terms of VUL, I think we could comfortably state that we created that market. This has been our flagship product, and we have done a great job in taking it to the people,” Chakrabarty said.
Traditional life insurance accounts for only 6% of Pru Life UK’s business, with VUL products comprising 94%. However, challenging market conditions have made customers more cautious about VULs, prompting the company to diversify its offerings. The introduction of Takaful is expected to improve Pru Life UK’s product mix and attract a new segment of policyholders.
According to data from the Insurance Commission, Pru Life UK recorded a net income of P3.7 billion last year, with total assets reaching P148.49 billion. The company generated P48.15 billion in total premium income, ranking as the second-largest insurer in the country.
In terms of New Business Annual Premium Equivalent (NBAPE), Pru Life UK led the industry with P9.83 billion, followed by Canada Life with P8.96 billion.
