NZ market not big enough for Shariah insurance

Life insurers have said they will not rely on any terrorism exclusions in policies to turn down claims from Christchurch victims.

But one commentator said that might be irrelevant because many would not have life insurance, anyway.

Massey University Muslim economics and finance professor Faruk Balli told media taking out an insurance policy with a bank or corporate insurance firm was against Islamic, or Shariah, law.

Muslims could take their own type of insurance, Takaful, which is not offered by any New Zealand insurance companies.

Massey University senior lecturer and insurance specialist Michael Naylor said the major international insurers had issued Shariah-compliant insurance schemes in the UK, so they knew how to do it. But he was not aware of any schemes being developed here.

“The Southeast Asian Islamic insurers, especially Malaysian, have not moved in here as the New Zealand market is too small and the Malaysian-style schemes are often not accept by more strict Islamic groups.”

He said New Zealand Muslims could still access Shariah schemes from overseas via a broker.

Naomi Ballanytne, managing director of Partners Life, said she did some work on the possibility of offering Takaful insurance while running ING Life but the market was not big enough to make the cost of building a product pay off.

“Some Muslims will buy normal insurance products and some won’t. Not having Takaful offered in New Zealand] does not mean they are all not covered.”

She said there would need to be a big customer base to make a product work.

“Not all people will buy it. You have to have quite a large population to make a product like that work and a population that’s wealthy enough to pay for the product as well.”

At Fidelity Life, chief distribution officer Adrian Riminton said: “While we’re always looking for opportunities to help more Kiwis get the benefit of insurance protection and close New Zealand’s under-insurance gap, we don’t currently have any plans to offer shariah-compliant insurance protection. We’re not aware of anyone else offering it in the market at present.”

ACC said this week it had received claims for all 50 victims of the mosque shooting, as well as almost twice that number of injury claims.

It received 28 claims for weekly compensation - of which 20 were approved. 

A number of mental injury claims were received although many were ineligible.