With the expansion of the Islamic communities across the globe, Islamic banking and takaful insurance are already playing vital roles in today’s global financial village.
Operators of Islamic banking argued that Islamic banking cannot be fully Sharia based unless there is Takaful to take care of their insurance businesses.
The Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, at the just concluded Islamic banking conference in Dakar, Senegal recently announced that the apex bank had given implicit approval to Jaiz Bank, as the first Islamic bank in Nigeria.
Lamido, who noted that Nigeria is the most populous black nation in the world with a population of about 150 million, boasts of a significant Muslim population, majority of whom yearn for such financial services.
Takaful is only a subset of the global insurance industry of $ 2.5 trillion; where the global Takaful business is approximately $3 billion only. However, takaful is the fastest growing area of the world insurance market. At present, takaful is growing at 20 to 25 percent per annum compared to world average growth of conventional insurance at five to six percent.
The Managing Director of Niger Insurance Plc, Mr. Clinton Uranta, however noted that takaful, unlike the conventional insurance, is believed to be unlawful by a majority of Sharia scholars due to the involvement of Riba (interest), Maisir (gambling) and Gharar (uncertainty).
He further expalined that Takaful, the Islamic alternative to insurance, is based on the concept of social solidarity, cooperation and mutual indemnification of losses of members.
Uranta said the people should not see the takaful products as religious products especially as the bottom line is savings, which can either be savings for school fees, pilgrimage, house rent or any other thing.
Pointing out that Takaful is not new to the global insurance industry as it is also being offered by many insurance companies globally; he said the product has been doing very well since it was introduced by Niger Insurance.
“In our own unique way, we have expanded the product in such a way that even non Muslims embrace it. But the bottom line is savings. Savings for school fees pilgrimage, house rent and what have you. That was how we modified it to suit our people in Nigeria. It is doing well and we will continue to bring innovation into it to make it more attractive to the insuring public,” he stated.
Islamic countries and other countries with a significant Muslim population in the recent past have encouraged the provision of financial services, including insurance under Islamic principles.
Takaful insurance operators at the sixth Annual World Takaful Conference held in Dubai, United Arab Emirates, predicted a $12 billion premium income from Takaful insurance this year. The $12billion projected premium from Takaful insurance represents 31 percent increase from the $9.15 billion income generated from the Islamic products in 2010.
Takaful insurance developed 27years ago, is popular mainly in Sudan, Egypt, Saudi Arabia, Iran, Kuwait, Lebanon, Malaysia, Brunei, Indonesia, Singapore, U.A.E., Bahrain, Bangladesh, Nigeria, Tunisia, Bahamas, Belgium, South Africa, Switzerland, Australia and in the United States.
The Coordinator of Halal Takaful Nigeria, a division of Cornerstone Insurance Plc, Hajia Thaibat Adeniran, admitting that although Nigeria is not an Islamic country, it has a large population of Muslims.
Adeniran stated, “We do not look at customers only as customers because we put personal touch to our relationships with them. We see customers as our brothers and sisters, so anybody coming into the business is coming with an open mind.”
For takaful insurance, she said the market has been very encouraging. “Presently, we are having the highest sales in Port Harcourt and this has shocked many people who think it is not possible. We are moving very fast here in Lagos too.