Morocco: Majority of participatory bank borrowers have acquired mortgage takaful plans
Source: Middle East Insurance Review | Jan 2023
Around three quarters of participatory bank borrowers have purchased takaful to cover mortgages that they took out since takaful plans were launched in the market in July, according to banking sources.
Participatory banks in the country have carried out several awareness campaigns, with videos and TV and radio advertising to get customers to buy the takaful cover, reported La Vie Eco. Banks contacted by the newspaper claim that mortgage loans are being covered by takaful according to schedule.
“As soon as we obtained the authorisation to market these products, our challenge was to migrate the 50,000 customers – who had already contracted the financing – to this insurance,” said Umnia Bank chairman Abdessamad Issami. He added, “Within four months, our achievement rate exceeded 72%.” Other participatory banks have reported roughly the same progress.
Al Maghribia Takaful managing director Abdelkrim Fazazi said that since the company’s launch at the end of June 2022, almost 70% of the nearly 6,500 borrowers who took out participatory loans through its Dar Al Amane platform had started to subscribe to a mortgage takaful plan. Among them, three-quarters have already acquired Shariah insurance.
To attract customers to buy mortgage takaful, banks – including Umnia Bank – exempt them from undergoing a medical examination if the loan exceeds a certain amount or if the customer is of an advanced age.
Meanwhile, takaful operators are planning to market other products such as multi-risk property takaful or home takaful soon. The approach taken is to get borrowers to first cover themselves against death and disability and then to insure their homes.
Furthermore, once customers have subscribed to Islamic death and disability insurance and multi-risk property insurance, banks would begin to market takaful investment contracts. M