An Insurtech company ETAP has unveiled an ethical car insurance product specifically based on Islamic principles and designed to give back to policyholders and their communities: ‘Takaful’.
Starting in Nigeria, users can now access the option on the ETAP app alongside other insurance options and immediately begin to give back to their communities while having the peace of mind that comes with having their cars insured.
ETAP’s business model is based on the concept of ‘Shared Value Insurance’, which focuses on incentivising people with rewards to reduce their insurance risk by adopting good behaviour.
ETAP enables drivers are able to earn ‘Safe Driving Points’ which can be exchanged for shopping vouchers for in-demand retail outlets, fuel, cinema and concert tickets, and a range of other experiences. The company also uses machine learning to build intelligent risk profiles that determine appropriate premiums for each driver, allowing them to achieve lower premiums by driving safely.
Takaful, ETAP’s newest offering, is designed to redistribute funds to users and support social good in their communities. The insurance product sees policyholders contribute to a common fund – covering each other against damage and loss. Once a year, ETAP collates all of the remaining funds after claims and associated costs have been deducted, and redistributes them to the policyholders – or to their chosen nonprofit cause.
Currently, the product includes nonprofit organisations working towards ending homelessness, educational programs, healthcare initiatives for the bottom of the pyramid, Human Rights Advocacy, and orphanages. Policyholders can also receive their surplus via cashback or a discount on renewals.
Globally, the takaful insurance market is projected to reach $97.17billion by 2030 – with ETAP becoming the first African insurtech to enable the option on the continent.
Speaking on the initiative, Ibraheem Babalola, CEO and founder of ETAP, explained the need for such an offering in Africa: “To drive insurance penetration in Africa, where less than 3 per cent 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. We have built one of the most exciting insurance apps in the world and ETAP Takaful will make it easier for more people to access the many benefits that come with our app and enable more enjoyable driving experiences”.