How Takaful Can Deepen Insurance Penetration in Nigeria

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Friday, October 8, 2021 / 11:22 AM / Bukola Akinyele-Yisau for WebTV / Header Image Credit: WebTV


Takaful has the potential to deepen insurance in Nigeria through personal life products that are tailor-made for households and MSMEs.


Mr. Zubairu Sulaiman, The Head of, Takaful Unit, National Insurance Commission, NAICOM, made this point while speaking on "Takaful and the Growth of Nigeria's Insurance Industry".


He challenged takaful operators to go down to small and medium businesses, understudy them and understand their insurance needs before coming up with products.


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He said NAICOM has been at the forefront of sensitization programmes such as the Firefighters programme for MSMEs in Lagos, Kano, amongst other states.


Insurance, according to him, is an essential part of any sound financial plan; it can also protect loved ones in the case of an accident, sickness, being disabled or untimely death.


Giving further insight on insurance and its contribution to the economy's growth, he explained there is a massive opportunity for Nigeria to tap into as it concerns low penetration.


On achieving scale, he believed that digitalization will be critical to the insurance industry's growth in Nigeria.


"The future of insurance industry is to embrace innovation and technology such as AI, Blockchain, Insurtech and Analytics amongst others as Millennials; Gen Z's are born into the era of telecommunications. The best thing for the insurance industry is to embrace innovation", He added.


Zubairu Sulaiman re-emphasized the need for takaful operators to invest in sensitization programmes that will increase awareness of the segment's value to the entire insurance industry.


For NAICOM, he said the regulator would soon issue a guideline on the regulatory sandbox. According to him, the sandbox is a platform where innovations and insurtech will develop new ideas.  


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He assured stakeholders that NAICOM would partner with the operators to bridge the gap on the knowledge of takaful. He explained collaboration plans with IFSB and AAIOFI for capacity building and skills development for operators and regulators.


Takaful is a Risk Sharing avenue for participants who put their funds together as Donations (Tabarru) to cover one another against specific risks.


The concept of donation and assisting one another against unforeseen risks and losses comes from Quran chapter 5 vs 2. 


About 500 Takaful companies operate in 72 countries, ensuring risk and asset management in the Islamic banking and finance industry.



In Nigeria, 5 Takaful companies operate with four full-fledged companies and one approved window by NAICOM.


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