With revelations that Islamic Insurance popularly called Takaful has found huge market in the Eastern part of the country where it is least expected to sell because of almost non existence of Muslims, there are feelers that more insurance companies may seek license to do Takaful Insurance in the years ahead.
These means outside Niger Insurance plc and Cornerstone Insurance plc that currently provides Takaful insurance as products, more insurance companies may come into the business under a new regime being proposed by the National Insurance Commission (NAICOM).
The attraction of Easterners, BusinessDay learnt, was the profit sharing characteristic as well as protection under the poll, which is nonexistent with the conventional insurance, whereas the population of Muslims in the Northern part of the Country is what is driving sales of the product in that region.
It was learnt that Takaful products are doing well because they are designed to carter for the low income earners and that its simplicity, makes it attractive to the public. Investigations revealed that motor cyclists, teachers, farmers and more are the major buyers of the products.
The cultural belief of the North is another factor said to be driving the sales of the products, as investment of Takaful funds is done in compliance with Sharia law, which prohibits gambling and profiteering and consumption of alcohol. The funds are not invested in economic activities that negate Islam and sharia, including brewing alcohol.
The insurance product line which was awakened by the development of economic activities and establishment of Islamic banks in the 70s and known as joint guarantee or share responsibility in Arabic operates according to Islamic laws. The products are designed to carter for Muslims and non- Muslims, and are meant to encourage saving culture and build capital, over a period of time to meet personal or business needs.
Babatunde Omosola, the vice chairman, Chartered Insurance Institute of Nigeria (CIIN), Oyo State Chapter, who spoke at the 2013 Media Retreat Organised by the CIIN, for members of National Association of Insurance Correspondents (NAICO) in Ibadan, said South-Easterners have embraced Takaful insurance products because of its simplicity.
He said: “Under Takaful plan, you can save regularly for a fixed period that is convenient for you. The accumulated targeted amount can be used to fund obligations such as purchase of land, house, marriage or hajj. It could also be used to meet other long term financial objectives, such as retirement, children education, travelling expenses as well as expected commitment.”
He noted that reports have shown that in many countries, Takaful products have been bought by non- Muslims due to some of its attractive features, which are not offered under conventional products, adding that the implication of this trend is that there is a promising market and potential growth for Takaful business