Car insurance products that are based on Islamic principles are not the same as their non-Islamic counterparts. For instance, Islamic principles require that any transaction must adhere to ethical standards. This means that a car insurance policy that is based on ethical standards, such as honesty, transparency, and fairness, would be attractive in Islam.
This appears to be the service that has been launched by ETAP, named ETAP Takaful, which aims to give back to policyholders and their communities.
ETAP is an insurance technology company that focuses on developing solutions and incentives to enhance the automotive experience in Africa.
The firm says that its new product is designed to promote social good and fund redistribution. The policyholders contribute to a common fund that covers each other against damage and loss. At the end of each year, ETAP deducts claims and associated costs from the remaining funds and redistributes the surplus to policyholders or their chosen non-profit cause.
The non-profit cause may include organizations that work towards ending homelessness, educational programs, healthcare initiatives, human rights advocacy, and orphanages.
Policyholders can receive surplus funds through cashback or renewal discounts.
ETAP is the first African insurtech to offer takaful insurance in Nigeria, allowing users to contribute to their communities while insuring their cars through the ETAP app.
The global market for takaful insurance is expected to reach $97.17 billion by 2030.
According to Ibraheem Babalola, CEO and Founder of ETAP, “To drive insurance penetration in Africa, where less than 3 percent of the population own any kind of insurance, we need to design new products that meet the diverse needs of people across the continent. In a country like Nigeria where Muslims make up almost half of the 220 million population, the vast majority of insurance products on the market are not an option to most Muslims because the way the policies are structured goes against their religious belief.”