Maybank & Etiqa Bring First Shariah Investment-Linked Plan to Singapore in Over a Decade

Singapore’s dynamic financial landscape is witnessing a significant shift, with a notable increase in demand for financial products that align with ethical and religious principles. This trend is particularly evident within the Muslim community, which increasingly seeks investment and insurance solutions that are compliant with Shariah law. Recognizing this evolving need, in collaboration with its insurance arm Etiqa Insurance Singapore (Etiqa), Maybank Singapore has launched Invest Future, a groundbreaking Shariah Investment-Linked Plan (ILP). This launch represents a landmark moment, marking the first Shariah Investment-Linked Plan introduced in Singapore in over ten years, effectively addressing a crucial gap in the market and offering a much-needed option for values-driven investors.

Related: Indonesia and Singapore Sign MoU to Boost Halal Industry Collaboration

An Increasingly Influential Market Segment

Invest Future is meticulously designed to cater to the growing segment of investors who prioritize ethical considerations and actively seek Sharia-compliant financial instruments. This segment is not only expanding rapidly in Singapore but also globally, reflecting a broader societal shift towards responsible and sustainable investing. Investors are becoming increasingly aware of the social, environmental, and governance (ESG) impact of their investment choices, seeking a harmonious alignment between their financial goals and their deeply held personal values. This innovative product offers a unique and compelling combination of flexibility, comprehensive protection, and the potential for long-term growth, all while adhering strictly to the fundamental principles of Islamic finance.

Deconstructing the Shariah Investment-Linked Plan (ILP)

At its core, a Shariah Investment-Linked Plan is a life insurance product structured in full accordance with Islamic law (Shariah). This means it adheres to specific principles that govern financial transactions within Islam, ensuring that all aspects of the product, from investment strategies to claims processing, are compliant. Unlike conventional ILPs, which can invest in a broad spectrum of assets, including those involved in activities deemed unethical (haram) by Shariah (such as gambling, alcohol production, conventional interest-based lending (riba), and pork-related industries), Shariah ILPs are strictly restricted to investments in permissible (halal) sectors. These typically encompass:

• Investments in Shariah-Compliant Companies: These are companies that operate in industries deemed permissible under Shariah and adhere to stringent financial ratios and screening criteria established by Shariah scholars. These criteria are designed to ensure that the companies are not excessively leveraged, do not derive a significant portion of their revenue from prohibited activities, and meet other ethical standards. Key screening criteria often include limitations on debt-to-equity ratios, restrictions on interest income, and prohibitions on investments in specific sectors such as those mentioned above.
• Sukuk (Islamic Bonds): Sukuk are often described as Islamic bonds, but they differ fundamentally from conventional bonds. They are investment certificates that represent ownership of an asset or project. They are structured to avoid interest (riba), a core prohibition in Islam. Instead of paying interest, Sukuk holders receive a share of the profits generated by the underlying asset or project, or a share of the ownership of the asset itself. This structure ensures compliance with Shariah principles.
• Islamic Funds (Mutual Funds and ETFs): These are professionally managed investment funds that pool money from multiple investors and invest in a diversified portfolio of Shariah-compliant assets. These funds are managed by investment professionals who adhere to strict Shariah guidelines and are overseen by Shariah supervisory boards. They offer investors a convenient and efficient way to access a diversified portfolio of halal investments across various asset classes.

The Growing Demand for Islamic Financial Solutions in Singapore

The launch of Invest Future is a direct and timely response to the increasing demand for sophisticated and accessible Islamic financial solutions not only in Singapore but also in the broader Southeast Asian region. This demand is fueled by a confluence of key factors:

1. A Growing Affluent Muslim Population: Singapore has a substantial and growing Muslim population, creating a natural and expanding demand for Shariah-compliant financial products and services. This demographic trend is mirrored across Southeast Asia, further amplifying the potential market for such offerings.
2. Increased Financial Literacy within the Muslim Community: Financial literacy within the Muslim community is steadily on the rise, leading to a greater understanding of and demand for specialized Islamic financial products that meet their specific needs and values.
3. Global Trend Towards Ethical Investing: The global trend towards ethical and sustainable investing is also significantly influencing the demand for Islamic finance, as it shares similar core principles of social responsibility, ethical conduct, and long-term value creation.
4. Regulatory Environment in Singapore: The Singaporean government has actively supported the development and growth of Islamic finance as part of its strategic efforts to diversify its financial sector and position the country as a leading international financial center. This supportive regulatory environment has encouraged the establishment of Islamic financial institutions and the development of innovative Shariah-compliant products like Invest Future.
5. Demand for Diversification Investments: Investors are increasingly seeking diversification in their portfolios, and Islamic finance offers access to a unique set of asset classes and investment strategies that are not typically available in conventional finance.

Maybank, as the regional offshore IWM hub for the Maybank Group in Singapore, is strategically positioned to effectively cater to this increasing demand and serve as a gateway to the broader Southeast Asian market. The introduction of Invest Future significantly reinforces its unwavering commitment to providing a comprehensive suite of high-quality Islamic Wealth Management (IWM) offerings.

Underscoring Core Values, and a Strong Customer-Centric Approach

Alvin Lee, Maybank Singapore Country CEO, emphasizes the strategic alignment of Invest Future with the bank’s broader objectives and its commitment to serving the community:

“Values-based financial solutions like Etiqa’s pioneering Shariah ILP are not simply a niche offering; they are an integral and essential component of our comprehensive IWM offerings. We are immensely proud to be the first bank in Singapore in over a decade to provide such comprehensive Shariah-compliant financial solutions, directly addressing the evolving and increasingly sophisticated needs of our valued customers and ensuring a strong alignment with their deeply held ethical considerations and religious beliefs.”

Raymond Ong, CEO of Etiqa Insurance Singapore, further highlights the ethical underpinnings of the product and its focus on creating positive societal impact:

“We are truly excited and honored to introduce Singapore’s first Shariah ILP in over a decade. Ethical investing is rapidly gaining traction, not just within the Muslim community but across the broader investment landscape, as investors increasingly seek to align their financial decisions with their values. Our Shariah ILP promotes the core Shariah values of cooperation (takaful), shared risk and reward, and purposeful, ethical investing that contributes positively to society. By offering values-based insurance to all sectors of the community, we aim to deliver ethically crafted, holistic solutions that our customers can trust and that contribute to a more sustainable and equitable future.”

The Horizon of Values-Based Insurance

Invest Future transcends the traditional, and often limited, focus of conventional ILPs, which primarily emphasize financial protection and achieving competitive investment returns. It fully embraces the expanding and increasingly important concept of values-based insurance. This holistic approach integrates ethical, social, and personal dimensions into its core framework, creating a product that resonates with investors on a much deeper and more meaningful level. The key tenets of values-based insurance, as exemplified by Invest Future, include:

• Risk Sharing (Takaful): Departing from the conventional insurer-policyholder dynamic, Takaful operates on the fundamental principle of mutual assistance, shared responsibility, and collective risk-bearing. Participants contribute to a common fund (known as the Takaful fund), which is then used to provide benefits and financial assistance to those who experience covered events. This structure fosters a strong sense of community, shared risk, and mutual support, aligning perfectly with the core principles of Islamic finance and promoting social solidarity.
• Purposeful Solutions with a Focus on Social Good: Values-based insurance prioritizes providing sustainable protection, tangible benefits, and positive social impact to the community rather than solely focusing on maximizing profit for shareholders. The emphasis is on creating long-term value, contributing positively to society through ethical investments, and promoting responsible business practices that benefit both individuals and the wider community.
• Enhanced Accountability through Shariah Oversight: Transparency and accountability are paramount in Islamic finance. All aspects of the product, including investment strategies, fund management practices, payout mechanisms, and the distribution of any underwriting surpluses (if any), are subject to rigorous and independent scrutiny by a qualified and reputable Shariah advisory board. This robust and independent oversight ensures strict adherence to Shariah principles at every stage and provides a high degree of transparency, confidence, and trust to policyholders.

A Tangible Reflection of Ethical Investing Practices in Action

Through the launch of Invest Future, Maybank and Etiqa are demonstrating a deep and unwavering commitment to offering financial solutions that uphold the fundamental principles of cooperation, fairness, shared responsibility, ethical conduct, and positive social impact. This innovative and much-needed product empowers customers to make financial decisions that resonate deeply with their values, religious beliefs, and ethical principles while simultaneously pursuing their long-term financial goals, securing their future, and contributing to a more just and equitable society.

With Invest Future, Maybank and Etiqa have not only introduced a timely financial solution but have also signaled a renewed commitment to the growth and accessibility of Islamic finance in Singapore. This offering provides a valuable opportunity for individuals seeking to align their financial planning with their values, paving the way for a more inclusive and ethical financial future.