By MODESTUS ANAESORONYE
A Gambian firm that specialises in the underwriting of Takaful insurance is targeting coming into Nigeria to establish, taking advantage of the National Insurance Commission (NAICOM) new licensing regime for Takaful insurance operators.
This would perhaps be the first time a West Africa insurance based company would be establishing in Nigeria, against the backdrop of growing interest of foreign investors into the industry particularly South Africans.
The firm, Takaful Gambia Limited which is the only takaful insurance operator in Gambia is being attracted by huge population of Nigeria and the potential for growth of the business given the demographic structure, BusinessDay learnt.
Fola Daniel, commissioner for Insurance who confirmed the interest of the Gambian firm said "Gambia is only about 1.2 million in population, and I think Nigeria’s 160 million should present bigger business opportunity for such specialist firm."
"Takaful insurance has very strong growth potential in Nigeria, and what it requires is only awareness so that people can appreciate the concept and the fact that it is the opposite of conventional insurance."
"Takaful is not an Islamic insurance, it is just the concept which makes it different for the conventional insurance, so it’s for everybody both Muslims and Christians."
According to Daniel, the Commission in line with the provisions of the 1997 Insurance Act, and the need to complement the current drive for financial inclusion targeted at increasing insurance penetration in Nigeria recently announced the release of Takaful-Insurance guidelines and registration requirements, to the insurance industry and other stakeholders.
Babajide Oniwinde, deputy director, Corporate Strategy stated that Takaful is part of the NAICOM’s financial inclusion initiative targeted at deepening insurance penetration.
According to him, the Commission quite understands the challenges to insurance buying in Nigeria including awareness, affordability and access, and therefore believes that Takaful insurance would go a long way in addressing these challenges.
As contained in the guideline, all intending applicants seeking license from NAICOM to transact Takaful-insurance business in Nigeria is expected to have Certificate of Registration as a full-fledge Takaful-insurance Company in accordance with International best practice; must have, as part of its name, words or terminologies that connote Takaful operations; must maintain a minimum deposit in a non-interest financial institution at all times
Besides, such company must provide for the establishment of an Advisory Council of Experts (ACE) in the articles of the Company, as well as establish an investment policy for the participants’ risk fund
Takaful Gambia Limited based in Banjul commenced operation in December, 2007 and operates based on the principle of "al-Mudarabah" or profit sharing contract. This system of Islamic Insurance is based on the concept of "Takaful" which translated means "joint guarantee".
With this in mind policy holders of TGL are entitled to earn revenue on the premium in consideration for their use of TGL’s products subject to the announcement of profit. The company policies include Banca Takaful, fire, travel, personal accident, marine, medical and general car insurance policies that cover most liabilities.
Takaful is a type of Islamic insurance, where members contribute money into a pooling system in order to guarantee each other against loss or damage. Takaful-branded insurance is based on Sharia, Islamic religious law, and explains how it is the responsibility of individuals to cooperate and protect each other.
Takaful insurance companies were introduced as an alternative to commercial insurance companies, which go against the riba (interest), al-maisir (gambling), and al-gharar (uncertainty) principles, that are outlawed in Sharia.
Source: Businessday
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