Indonesia: Takaful operators eye international-scale shariah insurance operations
Source: Middle East Insurance Review | Dec 2020
The Indonesian Shariah Insurance Association (AASI) has revealed that plans are afoot to build up takaful operations to international scale.
AASI chairman Tatang Nurhidayat, speaking at a shariah finance event, said, “At the KNKS (National Committee for Sharia Economics and Finance) there is an initiative to form world-class takaful or international-scale shariah insurance. We are currently working on this. Hopefully, after the merger of Islamic banks is completed, we will continue to the next stage related to the formation of Islamic insurance of world standards.”
However, he did not elaborate on the criteria that have to be met for Islamic insurers to be able to compete globally, according to a report in CNN Indonesia. He said that to achieve this goal, there are still a number of obstacles facing Islamic insurance.
The main hurdle is Islamic insurance literacy. He hopes that the government would promote Islamic insurance literacy through means such as encompassing Islamic insurance in a number of programmes. He gave as an example deploying takaful in the coverage of state property.
“Then, there is agricultural and livestock insurance. The stipulation in the ministerial regulation still refers to the term ‘conventional insurance’ which means that shariah insurance cannot participate,” he said.
He wants to target millennials to increase the market share of Islamic insurance in Indonesia. M