Aeman Sultan, a Research Scholar at Centre for West Asian Studies, Jamia Millia Islamia, while presenting a paper at a programme organised by Forum for Group Discussion on Economic Issues, a joint forum of Sahulat and Radiance Viewsweekly in the national capital on 13 March, highlighted the prospect and challenges in introducing Islamic Insurance in India through Insurance Cooperative Society.
Aeman made her introductory remarks with the Chinese revolutionary leader, Deng Xiaoping (1904-97) who had said, “No matter if it is a white cat or a black cat as long as it can catch a mice, it is a good cat.” While correlating this adage with the case of Islamic Insurance, she said, as soon as it is capable of meeting the actual purpose of Insurance and fulfilling the needs of the common man, complying with the Islamic Shari’ah, it is a good concept.
In order to simplify it further, she mentioned some important definitions like Takaful which means jointly guaranteeing among the participants. It is founded on the concepts of mutual cooperation and risk sharing. And also “Takaful is a system in which the participants contribute with the intention of helping the participants in the case of misfortune”.
In the brief historical journey of Takaful, she said, the first Takaful Company was established in 1979 in Sudan. As of now Takaful is offered by 239 global Takaful operators worldwide and the majority of the operators belong to GCC states. The major Market Players are: Gulf Cooperation Council (GCC) States, South East Asia (Malaysia) and Africa. From the current level US$12 billion, the global business is expected to touch US$20 billion in 2017 & US$25.5 billion by the end of 2020.
The learned speaker also said, India currently accounts for less than 1.5 per cent of the world’s total insurance premiums and about 2 per cent of the world’s life insurance premiums despite being the second most populous nation. Takaful contributions can be obtained by cooperative credit society and as per the prevailing law can be invested in equity-based financing. Foreign ownership, which has increased from 26% to 49%, affected (positively) the insurance penetration during 2001-2011. FDI in insurance sector can be utilised to establish an insurance cooperative society, through which Takaful can be offered.
Dr. Waquar Anwar, Secretary Board of Islamic Publications and Financial Advisor to JIH, while reflecting on the subject, said that we can introduce Islamic insurance through microfinance. Javed Ahmad Khan, Professor at the Centre of West Asian Studies, Jamia Millia Islamia, said efforts should be made to launch an insurance product for the Indian market but before that awareness has to be created in the society and the utilisation of the premium should be well defined. Most of the speakers were of the opinion to create and introduce a viable Islamic insurance model in India.