Friday, May 15, 2020 / 2:26 PM / Bukola Akinyele for WebTV / Header Image Credit: CornerstoneInsurance
The Nigerian Insurance Sector can benefit immensely from the Takaful market, if it is integrated into mainstream activities in the industry. Mrs. Thaibat Adeniran the Head of Halal Takaful, Cornerstone Insurance Plc, disclosed this at a recent webinar that was hosted through the Zoom platform speaking on "How has the pandemic affect Takaful? Does it position Takaful as an Opportunity or a Challenge?" she noted that at the global level there are 324 takaful operators in 47 countries. This is about 2% of the Total Islamic Finance Industry according to a Islamic Finance Development Report 2018.
Giving further insight she said the Global Takaful reached the market size of about $19bn by 2017, and is projected to scale up to $40bn by 2023.
Citing a Research and Markets Dublin report of 2018, Mrs Adeniran also gave a 13% growth forecast for the Takaful segment of the Insurance Industry, between the period 2017-2023.
Looking at Nigeria the Takaful Insurance segment made its debut in Africa's most populous nation in 2003, with the intent of driving financial inclusion for muslims, non-muslims and those with ethical inclinations.
She informed stakeholders who participated in the webinar that at the moment, Nigeria has two windows in the Takaful space and four licensed operators.
The product offerings that were available include Family Takaful (Individual and Group life) and General Takaful Business. In terms of the paid-up capital requirements for Takaful she outlined the two levels namely;
According to her "Of all takaful premiums, 60% are life and the remaining 40% is the general Takaful which was new in the country".
She listed the following as the Impact of COVID 19 on the Takaful prospects;
On ways in which Takaful can support the Insurance Industry, Mrs Adeniran identified the following;
Undescoring the value of technology, she harped on leveraging Digital platforms that enable the collaboration of diverse stakeholders (insurers, emergency services, hospitals, employers, mental health consultants, etc.) to work together and help customers in their desperate times are important too.
One of the key takeaways Mrs Thaibat Adeniran believed the industry can take from the COVID 19 pandemic, is the need to review policy terms.
"Though denial of coverage due to exclusions will frustrate a lot of business/corporate customers, we believe that the pandemic will lead to huge demand for more comprehensive business insurance/business interruption cover" She said .
The insurance expert citing an EFInA 2012 survey, stated that 4 million from people from adults population, said they would like to have Takaful products.
Giving the outlook for Takaful Post COVID 19, she stressed the following key points;