Sharia insurer gets approval to underwrite life policies

Islamic insurer Takaful has received regulatory approval to start offering sharia-compliant life policy covers beginning next month.

Chairman of the insurance company Hassan Bashir said last week the firm had injected additional capital after it received approval from the Insurance Regulatory Authority in September to underwrite the long term business that is offered according to teachings of the Muslim faith.

“We increased our capital by Sh150 million. We are ready to roll out in January,” said Mr Bashir.

Takaful Insurance now controls premiums of Sh500 million, barely three years since it became operational underlining the growth of sharia-based financial services.

Crescent Takaful sacco, an associated company, was launched last week with the target of enrolling over 300,000 members in the next three years with savings of over Sh20 billion.

Muslims have in the past been excluded from access to financial services due to their faith which does not allow investment in alcohol or tobacco manufacturing firms and interest earning options which are preferred by most fund managers.

The deposit-taking sacco will be open to all irrespective of religion and is also targeting the diaspora community.

“Kenya has been missing the potential of Muslims to aggregate capital and bring it to formal sector,” said Mr Bashir.

Other sharia compliant services recently launched include the Takaful pension scheme which Mr Bashir said is attracting savings in excess of Sh20 million a month and fund management by First Community Bank.

Introduction of sharia-based financial services gathered pace in 2008 following the opening of Gulf African and First Community banks, both of which have broken even and expanded their operations beyond Nairobi.