Nigerian Insurance Needs Tailor-Made Takaful Products For Households, MSMEs - NAICOM

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Thursday, September 23, 2021 / 6:48 PM / Bukola Akinyele-Yisau for WebTV / Header Image Credit: WebTV

 

Nigeria's quest for achieving improved penetration in the Insurance industry will rely heavily on the impact of tailor-made "Takaful" products designed for households and Micro, Small and Medium Enterprises (MSMEs).

 

Mr. Zubairu Sulaiman Darazo, the Head, Takaful Unit at the National Insurance Commission (NAICOM), who represented the Commissioner for Insurance, made this point while delivering the keynote at the Second edition of the WebTV Islamic Finance Webinar.

 

The webinar, which discussed the theme "Islamic Finance and Insurance", was an opportunity for regulators, operators and experts to explore how to unlock the growth of Takaful.

 

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He noted that as of Q2,2021, Nigeria had five Takaful companies (four full-fledged and one window) and 120 products approved by NAICOM.

 

He gave further details on the Takaful segment of the nation's insurance industry. He said Takaful premium contribution in 2020 was N4bn, which was low in terms of the country's total gross industry premium.

 

He identified lack of awareness and lack of skilled manpower as the challenges stifling the growth of the takaful market in the nation.


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Mr. Darazo challenged takaful operators to explore personal life insurance potentials and provide micro-insurance for Micro, Small, and Medium Enterprises (MSMEs).

 

In his presentation, Mr. Aminu Tukur, Vice-Chairman, Noor Takaful Insurance Ltd, stressed that insurance is essential for personal finance planning. It is also a necessary part of sound financial planning.

 

Speaking on Life Insurance/Family Takaful plans or products, the expert said it serves the following purposes;

  • Investment and Savings
  • Protection/Medical
  • Retirement

 

He added that the Takaful provides financial assistance to the policyholder's family. Tukur corrected the impression of insurance as an investment rather than a social protection scheme.

 

Fielding his views on the "Opportunities for the Growth of Takaful in Sub-Saharan Africa", Mr. Momodu Joof, CEO of West African Takaful Limited, described Sudan as a clear example of a nation that is the custodian of Takaful articles in the region with a 100% market penetration.

 

Mr. Joof, citing section 2 of the Takaful Act 1984 (Malaysia), defined it as "A scheme based on brotherhood, solidarity, and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute to that purpose".


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Speaking on the prospects for Takaful in the African region, he highlighted the key areas of  advantage include;

  • A Large Muslim Population.       
  • The consciousness of the Muslims to use Shariah-compliant financial products 
  • The 2007/2008 economic crunch which showcased the resilient nature of Islamic Finance 
  • The value proposition of Takaful embeds surplus sharing. 

 

In her presentation, the MD/CEO Hilal Takaful, Mrs. Thaibat Adeniran, emphasized a strategic approach in creating brand awareness for the industry. 


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She also emphasized the need for operators to intensify efforts in public enlightenment on the gains of Takaful through digital platforms.  

 

According to her, there should be intentional efforts by the operators in integrating Takaful in Islamic Finance studies, increasing the knowledge of its value to the industry. 


Adeniran advocated for dynamism and innovation in the development of Takaful products.

 

For Mr. Ekerete Ola-Gam Ikon, an insurance expert and management consultant, Takaful from the Arabic term 'To guarantee or mutually agree', is very attractive for the insurance industry.

 

He believed that through Takaful, Nigeria could achieve financial empowerment, growth in micro-insurance, financial inclusion, and deepen insurance penetration. 

 

Dr. Mustapha Ishaq Akinlaso of Taj Bank moderated the event.


Watch the Full Webinar Here

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