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Understanding The Benefits Of Islamic Insurance Protection
Monday, 20 Jan 2025
The separation of Sharia business units (spin-off) presents both opportunities and challenges for the future growth of the Sharia insurance industry. This has led many companies to develop strategies aimed at achieving positive performance by 2025, including PT Asuransi Tugu Pratama Indonesia Tbk (Tugu Insurance).
It is not surprising that most financial products now have a Sharia model, including in the general insurance sector. This Sharia concept addresses the concerns of many who wish to have insurance products but are worried about their Islamic compliance.
As we know, Sharia loss insurance provides compensation to the insured or policyholder for property losses covered under Sharia principles. With this insurance product, you can feel secure against unexpected events that may lead to financial loss.
When comparing conventional and Sharia insurance, you might wonder which is more beneficial for you as a consumer and what the advantages of Sharia insurance are. Here are the benefits of Sharia insurance:
1. No Expired Funds
In Sharia insurance, there is no system of expired funds. This is because Sharia insurance operates on the principle of deposit funds or wadiah. With this concept, customers will receive back the funds they have invested. These funds are kept separate from the asset or tabarru accounts. If not used, your funds will be returned by the insurance company.
2. Free from Riba
Sharia insurance ensures compliance with Islamic financial transaction rules. It prohibits practices such as riba, ambiguity in funds, and gambling. When you choose a Sharia insurance product, your funds will be managed according to the agreed-upon processes from the start.
3. More Transparent
In terms of fund transparency, Islamic insurance is more open. All activities and investment choices made by the insurance company will be reported to each relevant customer. You can also check the financial management status in case of losses or gains.
Tugu Insurance is confident that its Islamic Business Unit will grow in line with the company's targets after the spin-off. It aims to optimize market potential and seize opportunities by collaborating with other players in the Islamic economy ecosystem while providing services that meet the needs of customers and partners.
This is evidenced by the positive performance of Tugu Insurance's Islamic Unit, which shows growth in gross contributions, surplus tabarru funds, and company profits. By December 2024, Tugu Insurance's premiums for the Islamic Unit saw a significant increase to Rp 56.2 billion compared to Rp 28.2 billion in the same period last year, marking nearly 100% growth. The combined assets of the Islamic unit reached Rp 207.3 billion as of December 2024.
The Islamic Unit also received recognition through the "The Best Sharia General Insurance 2024" award at the Infobank Sharia Award 2024 and "The Best State Owned Enterprise Subsidiary 2024" from The Asian Post. The "Infobank Sharia Award 2024" was based on a study titled "Rating 252 Islamic Financial Institutions Version Infobank 2024," conducted by the Infobank Research Bureau, which evaluated the financial performance of Islamic institutions from 2022 to 2023 across six clusters, including general Islamic banks, Islamic business units of general banks, Islamic rural banks, Islamic life insurance, Islamic general insurance, and Islamic guarantee companies. Tugu Insurance, which is licensed and supervised by OJK and the Sharia Supervisory Board, continues to strive to provide affordable insurance services.
