01 April, 2008Indonesia-based PT Asuransi Allianz Life has permanently included an Islamic micro-insurance product line in its portfolio after the successful completion of a two year pilot. The product range is dubbed ‘Payung Keluagra’, which means ‘Family Umbrella’ and is specifically tailored to meet the needs of low income customers.
According to Jens Reisch, CEO of Allianz Life, the company was ‘the first international insurer to offer a micro-insurance product that complies with Islamic law’. The company has already been offering takaful products in Indonesia since April 2006, and now the range has expanded to incorporate Shari’ah-compliant microinsurance.
The majority of the Indonesian population is Muslim (over 88 per cent), so ‘ensuring that the products they buy do not go against the principles of the Quran is an important consideration for many,’ noted Reisch, ‘and that applies to potential microinsurance customers, too’.
Allianz Life is currently collaborating with seven domestic microbanks that offer the company’s microinsurance policies to the Indonesian market. However, Reisch expects to increase the cooperation network in future, citing around 600 microbanks in the country that ‘are large and modern enough to be viable partners’. He also sees considerable potential in large commercial banks, ‘more and more of which are entering the microfinance sector’.
At present, the company has around 42,000 microfinance policyholders, the overwhelming majority of whom are women, who own and run small businesses. Allianz Life has a far reaching aim to sell a total of 100,000 policies in the course of 2008, increasing this number three fold by 2010. ‘Our initial experiences have encouraged us greatly,’ said Reisch. The company has been able to build up a sustainable customer base and ‘is in the black’.
A new distribution concept has also been announced. To make its products more accessible, the company is going to introduce specialist micro-finance service providers, representatives and brokers at microbanks. The next step, according to Reisch, is to further diversify the product portfolio. Health insurance and children’s education, which are ‘important considerations for low income families’, as well as property insurance are among the new planned policies.
Allianz Life is part of Allianz Group, an insurance, banking and asset management services provider with a global reach. Outside Indonesia, the Group’s local subsidiaries currently offer microinsurance products in India and Egypt, with 250,000 and 30,000 takers in each country respectively.