Friday, Jan 30th 2015

Sharia insurance policyholders paid dividend

Monday, April 8, 2013 - 00:00 -- BY JOEL MAGU

IN line with the Sharia law on insurance of sharing profits and losses, Takaful Insurance of Africa company has shared Sh15.6 million surplus from its premium pool with clients.

The company on Saturday issued 2,000 clients who contributed to the company's premium pool over the last one year with cheques for various amounts depending with the money they paid for various covers.

The three highest paid customers took home Sh240,000, Sh150,000 and Sh100,000 respectively.

Takaful insurance which follows the sharia law on business, operates on the principle of shared responsibility. Therefore the insurance company offering takaful services operates the insurance fund raised from premiums in return for a share of the surplus on underwriting and a share of profit from investment.

The policyholders come together to pool their risk in a fund and have an interest in the performance of the fund. They contribute donations into the fund which is in turn used to provide financial compensation to participants if predefined adverse effects occur.

In the event that the fund has a profit at the end of the year after re-insurance claims, policyholder benefits and transactions costs are met, such profit is distributed among eligible policyholders.

“We have achieved so much even with the competition. We also want to have a long-term policy plan on education and credit protection,” said Takaful Insurance of Africa CEO Hassan Bashir on Saturday evening during a dinner the company hosted for its clients.

Bashir said that TIA has taken vast steps towards widening it's 'small but effective and growing' network in Kenya.

He revealed a five-year plan that would see the company spread its wings all over the country as the new model of insurance continues to generate more interest in the country.

“We want to establish networks in Nyanza, Western and also Isiolo county,” he said.Licensed to operate as an insurance company two years ago, TIA has 4 branches across the country together with 80 intermediaries.