1. 6TH GLOBAL ISLAMIC FINANCE FORUM NOVEMBER 2016, NAIROBI - KENYABY
Joof Momodou Musa
MANAGING DIRECTOR/CEO
ISLAMIC INSURANCE(TAKAFUL)/MICRO TAKAFUL GROWTH POTENTIALS IN AFRICA
JAIZ TAKAFUL INSURANCE PLC

2. What is Takaful
“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 for that purpose.”
As defined in Section 2 Takaful Act 1984: (Malaysia)

3. What is Takaful….
Simple definition
It is a cooperation between members of a community whereby each member undertakes to contribute a certain sum of money to a fund which will be used mutually to assist the members against a defined loss or damage

4. OPERATIONALISING TAKAFUL With A Two-tier Contract (Tabarru’ & Commercial)
Contract between Participants & T.Operator.
Contract between the Participants themselves
Takaful Funds
General
Family
Takaful Operator
Participant
Wakalah (contract for managing the fund) OR
Mudharabah (profit sharing) contracts OR
Any other commercial contract not forbidden by the Shariah.
Tabarru’ Contract

5. Management Responsibility
The Shareholders Interest
The Participants
The Economy
Management’s Tripartite Responsibility

6. Takaful Regulatory Framework
Government Supervisory
Board of Directors
Sharia Advisory Board
Takaful Operations

7. Difference Between Takaful and Insurance
Conventional Insurance
Takaful Insurance
by Shareholders
Ownership
Risk
Surplus
by Participants
Transfer to Insurers
Shared by Participants
Belongs to Shareholders / Company
Belongs to Participants
by Shareholders
by Participants
Surplus
Shariah S.Board
None
MUST
7 November 2018
MMJOOF

9. Differences…(continued)
Gharar
Maisir
Riba
Gharar
Maisir
Riba
Takaful
 Tabarru’ filters out all the objectionable elements from the insurance contract.  Takaful = Insurance Minus The Objectionable Elements

10. Comprehensive Risk Insurance Increased Economic Activity
Takaful & Economy…
Comprehensive Risk Insurance
Insuring the uninsured insurable risk
Successful Economies are backed by vibrant Insurance industries
Increased Investment with more participants in Insurance
More confidence for new economic ventures
Increased Economic Activity
7 November 2018
MMJOOF

11. Takaful & Economy Employment Tax Revenue
Creation of Employment opportunities
Tax Revenue
More Tax Revenue from the Insurance Industry
7 November 2018
MMJOOF

12. Successful Developments
Successful Developments.. Nigeria’s Minister of Finance Launches Takaful Operations from 2013 SI
Nigeria’s Minister of Finance Launches Takaful Operations from 2013
Nigeria has great potentials for Takaful Insurance considering its large population and Muslim community coupled with the fact that Takaful is for all irrespective of faith. Already Two Operators have been Licensed this year.
7 November 2018
MMJOOF

13. Successful Developments
Successful Developments.. Nigeria’s Minister of Finance Launches Takaful Operations from 2013
TGL Annual Profit Sharing
From 2009, TGL has annually distributed profits to participants.
Micro Takaful has great potentials in West Africa following the success story of Takaful Gambia Limited

14. Successful Developments..
Takaful Insurance of Africa in Kenya continuous to do well
Phoenix of Zambia’s Takaful Window is doing well
We have Zep-Re Takaful Window in Sudan providing Re-Takaful and Training
Africa Re-providing Re-Takaful from Egypt……
Tanzania has also Launched a Takaful Operation

15. CHALLENGES FACING TAKAFUL IN NIGERIA
ARE THERE CHALLENGES SO FAR?
REGULATIONS
OPERATIONS
THE MARKET
THE POTENTIALS

16. CHALLENGES Are there challenges???
Yes but the usual challenges faced with business start ups and more with Insurance.
One would think its too soon to call the hurdles as insurmountable challenges.
Takaful Operations have just began in Nigeria and have takle Capacity building, Awareness Creation, relevant Products development……just like the conventional insurance that has been in existence for decades

17. CHALLENGES
If Takaful is another tool for Financial Inclusion which indeed it is, Investors and shareholders should give it the necessary support and appreciate the fact that it falls on long term investment. For Takaful Operations to remain ethical, we must not expect it to miraculously generate profit within a year or two. The Participant’s account normally will start generating profit soonest

18. REGULATORS
As a new entrant to the Insurance Industry, the Regulators are expected lend Takaful full support.
The Takaful Operation guide lines needs to be perfected along the line of developments as borrowing policies from Conventional practice may not be inline with international best practice for Takaful
Report standards for Takaful are mostly different and needs to be put inline best standard practice

19. Operators
Operators
Operators must distinguish their Practice based on ethic, transparency and fairness
Unhealthy competition leading to rate such malpractice in undercutting or rates
Operators must endeavor to be reachable soonest
Operators must embark on Capacity building
There is urgent need for collaboration especially on marketing campaign and awareness creation

20. The Consumers Takaful needs the support of the market to grow.
Expectation on the fulfillment of Its obligations and profit sharing should be within a reasonable time frame.
Takaful has been a success globally and Nigeria could not be an exception to the success story.

21. POTENTIALS Takaful has great success potentials in Nigeria
The large Population
The various economic Activities ranging from Agriculture, Trade, Oil and Gas----
Micro Takaful could influence Rapid Financial Inclusion

22. السلام عليكم ورحمة الله وبركاته
Thank You Shukran
Jere jef Sereign Touba
Questions & Answers
23/03/2014
Joof Momodou Musa