Etiqa launches Singapore's first takaful insurance

Demand for Islamic financial products from the Middle East and Southeast Asia is growing.

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Etiqa Insurance Pte Ltd. has launched Singapore's first takaful insurance product in more than a decade, as it tries to bridge the market gap in Sharia-compliant funds.

Etiqa, the insurance arm of Malaysia's Maybank Group, launched Invest Future in January, which is an investment-linked insurance product that promises long-term wealth accumulation that is consistent with Islamic law.

"Prior to Invest Future, there were few Sharia-compliant investment options available in Singapore, particularly in the banking and fund management sector to cater to Muslims seeking products aligned with their religious beliefs," Raymond Ong, CEO at Etiqa Insurance Pte. Ltd., told Insurance Asia.

The global market for takaful — an Islamic insurance system based on mutual assistance and cooperation — is projected to grow 12% annually until 2029 to $57.9b, according to London-based Business Research Company.

There are about a million Muslims in Singapore. But only 5% of them own takaful insurance, Muhammad Ridhwaan Radzi, managing director at Islamic Finance Singapore Ltd., said in a separate interview.

"The rest tend to use conventional products like term, whole life, or insurance-linked products," he said. "That said, there is a growing number of Muslims using investment-linked products offered by Muslim-friendly insurance groups."