When the concept of creating SihaToken was in its infancy, a dominant question arose:
How can we generate a health care blockchain that is ethically grounded for our Islamic community?
It needed to be a blockchain that lends sound financial protection for preventative health care as well as core medical services, in alignment with consumers’ religious sensitivities.
In SihaToken’s founding nation, The Kingdom of Saudi Arabia, roughly 93% of the 3.3 billion population are Muslim. Globally, roughly 23% of the global population are Muslim — an estimation based on 1.8 million as of 2015 according to a Pew Research Center report.
Interest, known as Riba or Usury is a forbidden element in order to be Sharia compliant. Therefore, adopting the interest-free concept of Takaful which meets the standard of ethical operational framework in Islam.
The concept of Takaful is no stranger to Muslims, defined as “solidarity” or “mutual obligation” in Arabic. Lexicon aside, Takaful is an Islamic insurance system devised to fully comply with Sharia laws, where the mutual funds protect members in case of loss or need. All participants agree to issue a payout from that pool of funds if any one participant is hurt. The payout is subject to the terms and conditions governing the fund.
The fund operator, however, can use the pool of funds to invest in Sharia compliant ventures to grow the fund. Any profits from such ventures are shared between the operator and participants.
Takaful ensures that no one participant can gain advantage at the expense of another, creating cooperation among policyholders while promising that any future wealth is a shared prosperity for all.
The global Takaful market landed at US$ 19 billion (SAR 71 billion) in 2017 and is expected to exceed US$ 40 billion (SAR 150 billion) by 2023. Currently, Saudi Arabia, the UAE and Malaysia are leading the industry with their relatively mature Islamic insurance market. With a broader lens, Takaful is thriving in the Asia Pacific and Gulf Cooperation Council (GCC) due to a sizeable Muslim population.
Despite that fact, innovations related to Takaful are still relatively untapped opening up significant opportunities. There is also a higher readiness in Islamic nations for risk coverage, given the volatile nature of the current economy.
SihaToken, the world’s first Takaful health token.
When SihaToken launches, its adoption of the latest blockchain technology to solve the ever increasing medical inflation rates as well as the high-interest rates and premiums charged by the incumbent personal finance and health insurance companies respectively, will modernize Islamic health care financing and bring synergized benefits to all.
SihaToken will enable the community to transact Takaful coverage with medical needs of preventative health care as well as Core Medical Services (CMS) not covered by traditional insurance companies — such as bariatric surgery, hair transplant, dental braces, LASIK eye surgery and other “cosmetic procedures”.
Most insurance companies simply do not view reconstructive or cosmetic surgeries exemplified above as necessary to your health and well-being and therefore, opt out of cover.
We want to remove the “elective” connotation to these treatments, as elective medical procedures are increasingly becoming mainstream and consumers face new modern day risk factors such as obesity and chronic diseases — calling them CMS instead.
Additionally, traditional insurance and Takaful insurance companies have been slow to adapt to this increasing demand. Sihatech has calculated the total addressable market for these future core medical services to be close to US$ 7 billion (SAR 26 billion) in Saudi Arabia alone.
Given the extended choices, patients will feel empowered to have a more hands-on approach to financing their own health care system. This wealth of information will support a more informed decision process and lift any self-imposed limitations — allowing patients to select the best medical treatments without financial worries.
The blockchain element also provides the security blanket that makes personal medical data secure, resistant to breaches and hackers. Patients control fully their own medical data and autonomy to provide access to only those they choose.
Another benefit is that the blockchain will now allow us to disrupt incumbent insurance companies and allow the industry to focus on streamlined access to quality health care services at an affordable cost.
Sihatech will be offering Takaful SihaTokens that can be reimbursed at top-tier clinics across Saudi Arabia. These tokens can also be leased to the patient by a third-party holder who buys back the instalments through a blockchain-enabled smart contract. Thereby financing the patients’ access to CMS without the need for a third-party insurance company, personal finance or bank.
