The distribution of takaful products through banks

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Produced in partnership with Trowers & Hamlins LLP

Practice notes

The distribution of takaful products through banks

Copyright © 2025 LexisNexis

Produced in partnership with Trowers & Hamlins LLP

Practice notes

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Like their conventional counterparts, Takaful operators (ie Islamic insurance providers) have a number of ways to distribute their Shari’ah—compliant life insurance products (referred to as family takaful products) and their non-life insurance products (referred to as general takaful products) to the public. Such distribution channels include the takaful operators’ direct sales force, independent insurance brokers and e-tools. An additional distribution channel is bancatakaful.

What is bancatakaful?

Bancatakaful refers to the distribution of takaful products through banks, be it Islamic or conventional, provided that the conduct of bancatakaful activities is in line with the principles of Islam (Shari’ah). Essentially, it is when a bank acts as an agent of the takaful operator to enable the takaful operator to utilise the bank’s network.

The key rationale for takaful operators to use banks as distribution channels for their takaful product is so that they can:

•
tap into the banks’ existing customer base
•
associate themselves with reputable banks and benefit from the banks’ experience in product distribution
•
maintain smaller direct sales teams as

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Jurisdiction(s):

United Kingdom

Key definition:

Takaful definition

What does Takaful mean?

Islamic insurance.

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