Uganda insurers want Takaful fast tracked
KAMPALA—UGANDA ------Insurers in Uganda are pushing for the Introduction of Takaful Insurance scheme which they say will boost the insurance sector by attracting more clients.
“We have signed a Memorandum of Understanding (MOU) with Alhuda CIBE to ensure the success of takaful in Uganda. Our partnership will extend to, among others, capacity building, product development, design and distribution, appropriate models for this market and advising on suitable regulatory frameworks,” said the Uganda Insurer’s Association Chief Executive Officer Miriam Magala during the Takaful symposium in Kampala. She said “Takaful will allow for, among others, diversification in the products that the industry can provide to its ever changing and growing market and given that insurance penetration in Uganda is less than 1%, we are confident that more and more Ugandans take up insurance with the introduction of Takaful,” To see that the Islamic origin kind of Insurance kicks off in Uganda, UIA has already signed Memorandum of Understanding with Alhuda Centre of Islamic Banking and Economic (CIBE), to ensure the successful implementation of Takaful. Magala said the MOU will help UIA in designing products and capacity building of the insurers’ staff in the country about TAKAFUL insur- ance. The Government has assured the Insurers that Ministry of Finance Planning and Economic Development will support the initiative that drives the introduction of the Islamic financial services in the country. “Let the Industry player be assured that government’ is support all kinds of development in the financial sector such as the introduction of Islamic financing which is seen as one of the ways the country will achieve financial inclusion. Similarly, the Insurance Regulatory Authority of Uganda has also indicated a need to collaborate as the in- dustry through a consultative process to ensure that the proper regulation is in place to support industry initiatives such as the introduction of TAKAFUL Insurance,” Henry Mbaguta- Assistant Commissioner Financial Services Department said. He told the participants during the presentation on TAKAFUL Insurance in Kampala which was attended by participants from the Insurance sector, Banking and Consumer groups. What is TAKAFUL Insurance? According to Mr. Muhammad Zubair Mughal, Chief Executive Officer, of the Alhuda Centre of Islamic Banking and Economic (CIBE), Takaful insurance is the Sharia compliant brand name for the Islamic alternative to conventional insurance and is based on the principal of Ta’awan or mutual assistance.
Mughal further noted that although people generally think about Islamic financing or Islamic banking & insurance as only for Muslims, these services can be utilized by both Muslims and non-Muslims.
Takaful insurance can be traced as far back as 1979 when the first Takaful company was opened up in Sudan. Since then more companies have opened up in countries like Malaysia, Pakistan, Iran and Egypt.
Miriam Magala, Uganda Insurer’s Association Chief Executive Officer