What is Jaiz Takaful Insurance Plc all about
Jaiz Takaful Insurance Plc Company is a full-fledged company
of its own, quite independent of Jaiz Bank. Jaiz Bank is also an independent
company, they do not own Jaiz Takaful Insurance. It’s however, fortunate that
we have some of the directors or shareholders who are equally participating in
both Jaiz Bank and Jaiz Takaful Insurance but we are not one company. Jaiz
Takaful Insurance plc is a full-fledged company, owned by Nigerians and if
anything foreign, is me, the Managing Director/CEO who is a Gambian serving to
make sure that the Company is well established and well grounded in the
economy. The Chairman of the Company is Alhaji (Dr.) Umar Mutalab, a former
Nigerian Minister of Finance and Chairman First Bank, United Bank for Africa
and renowned businessman in Nigeria. Our Board of Directors are well
experienced and highly esteemed members of society who have retired from active
civil service and have brought their wealth of experience to steer the affairs
of the company.
There are fears in some quarters that the concept of Takaful
Insurance is being promoted by some Islamic countries determined to Islamise
Nigeria. How true is this?
Thank you very much for the opportunity. Let’s look at
Takaful (Islamic insurance) from all angles objectively: Takaful (Islamic
insurance) is not all about religion though Shariah compliant, it’s a scheme or
a system of insurance which is much fairer by promoting profit sharing. When
people talk about Islamising Nigeria and associating it to Takaful (Islamic
insurance), people should appreciate that Takaful is a new global system of
doing insurance which addresses both Shariah and consumers’ concern. It’s a
global tool or vehicle for economic growth and Nigeria is part of the global
economy. Nigeria is not an island of its own with regards to global economy.
So, a new tool for global economic growth should equally be embraced by
Nigerians. Research has reliably reported that Takaful is growing globally at
the rate of 40 per cent per annum as opposed to five per cent annual global
growth rate of conventional insurance. You may be surprised to learn that the
Chartered Institute of London is now teaching Takaful. So, if London, America,
Canada, Malaysia, Spain, Sudan Egypt, Gambia and many other economies embraced
Takaful why should Nigerians simply choose to associate it to any religion?
Takaful is a concept of insurance which promotes sharing of
profit. Since the conventional method only offered compensation after a lost,
Takaful comes to say, we can do better. Conventional insurance practice
dictates collection of premiums (money) from people to settle claims after
which generated profit or surplus belongs to the company and shareholders.
Indeed, in that instance, it forms part of poverty
alleviation. No single Naira of the fund of Takaful company goes to support any
Mosque. On the other hand, the people that are employed here are employed on
qualification basis. The head of our IT department is a Christian and we have
some marketing staff who are Christians. So, there is nothing like Islamisation
rather Takaful is simply compliant to Islamic values and jurisdictions which
promote fairness and transparency; the money is for the people and if generates
profit, it is shared among the people. Takaful has nothing to do with
Islamising Nigeria.
What is Nigeria’s percentage share of the Takaful Insurance
market globally?
Well, this concept of Takaful or Islamic insurance is new to
Nigeria but not to the world. It’s new to Nigeria because the regulators
insisted on completing the operational guidelines for Takaful. Nigeria by its
complexity, the regulator had to give it all the necessary attention to make
sure that the regulations and operational guidelines are in place before they
issue license to any Takaful company. As such, they have been working for a
very long time on the operational guidelines until 2013. There were many
consultations; Takaful experts and consultants from different markets and
different jurisdictions were contacted and some contracted to make sure the
operational guideline was in place in 2013.
By 2016 two Takaful companies were licensed and that was the beginning
of the unfolding of the Takaful market in Nigeria; the market is very large
considering the population as compared to most African countries which are less
than a hundred million. By analysis, if Nigeria is claiming to be around 180
million population, and where 45% of that population are Muslims, Nigeria would
still be a huge market much more when Takaful is not for only Muslims but for
all. Because of its transparency and fairness, non-Muslims have found
themselves embracing Takaful. Before coming to Nigeria, as a Gambian, I
established the first Takaful operation in the Gambia, West Africa and after
six years of managing Takaful Gambia, I travelled to Lusaka, Zambia. Recall
that Zambia is 14 million in population and 95 per cent of whom are Christians,
yet we were able to establish Takaful operation in Zambia. Staff of the
company, up to the time I was leaving, were 100% Christians, yet they operate
Takaful under the guidance of a Shari’a advisory board.
Do we have experts with the right skills set to promote the
concept of Takaful insurance given the fact that it’s still an emerging industry
in Nigeria?
It’s an emerging industry in Nigeria but not in the world.
Note that there is universality of expertise; there is no boundary to the
movement of expertise. If you go to Gambia, you’ll find many Nigerian experts
who are working there. You go to London, you find many African expertise who
are working there, serving the economy of UK. You go to America, likewise. So,
when economies relate, expertise and skills are always in exchange. Speaking to
you right now, I’m one of those Takaful consultants who has a passion for
sharing the little knowledge I have in making sure that people appreciate and
develop skilsl for the growth of Takaful. Takaful is not anything different
from conventional insurance practice other than in the accounting; Takaful
principle is that both participants and operators stand to benefit from profit
sharing, creating a win-win situation in doing insurance. Those who suffer losses
are paid expeditiously and those who do not suffer any loss stand to benefit
from the profit generated by the company. So, since the principles and practice
of Takaful are the same in many respects as that of conventional, it’s not a
challenge to train current conventional insurance experts on Takaful. Our
workforce was sourced from the conventional insurance industry of Nigeria. They
are well-experienced people, who have served many years in various capacities
of reputable conventional insurance companies.
Do we have the necessary legal framework to regulate Takaful
insurance in the country presently?
With the current regulators, I can tell you that if we are
not over regulated, we cannot say the industry is under regulated. The laws are
very efficient. The National Insurance Commission (NAICOM) is on top of the
market and global insurance developments. I told you earlier that it took
NAICOM many years to train its staff, invite experts and put in place
operational guidelines for Takaful, the law was passed in 2013 by NAICOM which
is the same body that license and regulate conventional insurance companies
too.
Transparency and fairness are the characteristic selling
points of Takaful. There is little or no room for manipulations. NAICOM’s
regulation of Takaful is very rigorous and they inspect our books periodically
to ensure there is no malpractice. Takaful have board of Directors who approve
operational policies. Also, we have Advisory Council of Experts who advise us
on Shariah compliance. Their role is more of participants’ or consumers’
representative. Shariah guidance ensures that we deliver accordingly and
ethically. In practice, we must operate with two distinctive accounts namely:
Participants’ Account and Management’s Account. 70 per cent of contribution
goes to the Participants’ Account while 30 per cent goes to the Management’s
Account. There should not be any given time that the Management Account lacks
fund to a point of dipping their hands into the Participants’ Account which can
only be used for settlement of genuine claims, insurance brokers’ commission or
to pay for re-Takaful. So, Management can only use their 30% of income or the
shareholders’ capital for management expenses. So, our selling points include
fairness, transparency and expeditious settlement of genuine claims which forms
the priority of insurance business. Takaful is expected to pay genuine claims
faster since claims are paid from the Participants’ Account the surplus of
which goes for distribution at the end of business year. We are in business to
pay claims but have an obligation to expedite settlement of genuine claims.
Another advantage of Takaful is the fact that when you do not suffer any loss,
at the end of the year, when profit or surplus is declared, it is distributed
among the participants who have not suffered losses. Out of the amount which
goes for distribution, is a prescribed ratio paid to the needy (Zakat). For every
thousand, we set aside N25 for the members of society who are less privilege.
Such payment surely forms part of poverty alleviation and shows that Takaful is
for all. If you are rich and have something to insure with Takaful, you may
either benefit by way of claims settlement or by sharing from profits
distribution and if you are so deprived that you don’t think of meeting your
square meals, pray and support Takaful well since 25 per cent of surplus going
for distribution will be for less privileged members of society (Zakat).
So far what has been your experience as a company promoting
Takaful insurance in terms of success rate and all?
Startups have challenges. We, like any other startup, have
got some challenges but they are not insurmountable. There is the challenge of
creating awareness for people to know that we are around, to name a few. Of
course, awareness creation could be done through television, radio or print
media and whichever way you take, it’s associated with exorbitant cost, this
increases our management expense. When, in the spirit of fairness and
transparency our Takaful model can only benefit from the 30 per cent of the
income generated. From the first year, income starts growing gradually before
you break even. Though there is high cost associated with startups, we are
convinced that we’re getting there! The good part of the experience is that
we’re covering more ground than expected with the time we are in. Now, when you
talk about Takaful, a lot of people would already have an idea. Though we need
to do more in terms of spread and accessibility, we started with our head
office in Abuja and we have branches in Kaduna, Kano and Lagos. We look forward
to establishing our next branch in Port Harcourt. The experience is
tremendously positive and we are very hopeful that by the grace of the Almighty
Allah we are here to stay and to proof to consumers that Takaful is a better
system of doing insurance business.
Can non-Muslims also participate in Takaful insurance or is
it restricted to the Muslim faithful alone?
We live in a global village now, as such, we should not
allow ourselves to be confused or to be served with wrong information. We
should always find out and know the truth. Takaful is a system of doing
insurance that is compliant to Islamic laws, which promote fairness and
transparency and is open to all irrespective of faith. However, we are not
allowed, as operators, to insure something illegal or anything not in
conformity with Islamic laws such as a cigarette factory, brewery factory and
brothel. But we would insure anything that is legal and Halal. There’s no
segregation, not even when sharing profit: You are paid as Muslims are paid.
So, it’s a system for all.
What’s the future of Takaful insurance in Nigeria?
Takaful insurance is very promising, because Nigeria is a
large market. The market is blessed with a lot of opportunities. We pray to the
Almighty Allah for peace and stability in Nigeria, such that the people
identify themselves as Nigerians and not by religion. Once the security
challenges are overcome, the economy would be one of the best in the world.
Nigeria is endowed with both natural resources and human capital. The people
are hard working in all spheres of life; in business and in academics and
Takaful has a stake in all economic ventures.
first published in The nation of February 10, 2018
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