Post COVID-19: How Takaful Can Support The Nigerian Insurance Sector

May 15, 2020 VitalNews 0 Comments COVID19, Insurance, Nigerian, post, Sector, support, Takaful

Friday, May 15, 2020 / 2:26 PM / Bukola Akinyele for WebTV / Header Image Credit: CornerstoneInsurance

The Nigerian Insurance Sector can benefit immensely from the Takaful
market, if it is integrated into mainstream activities in the industry. Mrs.
Thaibat Adeniran the Head of Halal Takaful, Cornerstone Insurance Plc, disclosed
this at a recent webinar that was hosted through the Zoom platform
speaking on “How has the pandemic affect Takaful? Does it position Takaful as
an Opportunity or a Challenge?” she noted that at the global level there
are 324 takaful operators in 47 countries. This is about
2% of the Total Islamic Finance Industry according to a Islamic Finance
Development Report 2018.

Giving
further insight she said the Global Takaful reached the market size of about
$19bn by 2017, and is projected to scale up to $40bn by 2023.

Citing
a Research and Markets Dublin report of 2018, Mrs Adeniran also gave a 13%
growth forecast for the Takaful segment of the Insurance Industry, between the
period 2017-2023.

Looking
at Nigeria the Takaful Insurance segment made its debut in Africa’s most
populous nation in 2003, with the intent of driving financial inclusion for
muslims, non-muslims and those with ethical inclinations.

She
informed stakeholders who participated in the webinar that at the moment,
Nigeria has two windows in the Takaful space and four licensed operators.

The
product offerings that were available include Family Takaful (Individual and
Group life) and General Takaful Business. In terms of the paid-up capital
requirements for Takaful she outlined the two levels namely;

Life or General Business – N100m

Composite Business – N200m

According
to her “Of all takaful premiums, 60% are life and the remaining 40% is the
general Takaful which was new in the country”.

She
listed the following as the Impact of COVID 19 on the Takaful prospects;

Most prospect now appreciate
the need to plan appropriately via Takaful.

More prospects now seek for
better understanding on Takaful.

There are so many knowledge
sharing platform opened for discussions.

People now appreciate
benefits of Takaful as a lot of claimable incidents (e.g. Fire, Accident
even death etc.) materialized and people are been compensated.

Worry of survival during and
after lock down

On
ways in which Takaful can support the Insurance Industry, Mrs Adeniran
identified the following;

Coverage applicability and
health and safety advice

Round-the-clock availability
across human and virtual channels

Predictive claims capabilities
and automated payouts powered by data and analytics

Frictionless claims through
smart systems and processes

An agile, smart workforce
enabled by technology

Undescoring the value of technology, she harped on leveraging Digital
platforms that enable the collaboration of diverse stakeholders (insurers,
emergency services, hospitals, employers, mental health consultants, etc.) to
work together and help customers in their desperate times are important too.

One of the key takeaways Mrs Thaibat Adeniran believed the industry can
take from the COVID 19 pandemic, is the need to review policy terms.

“Though denial of coverage due to exclusions will frustrate a lot of
business/corporate customers, we believe that the pandemic will lead to huge
demand for more comprehensive business insurance/business interruption cover” She said .

The
insurance expert citing an EFInA 2012 survey, stated that 4 million from people
from adults population, said they would like to have Takaful products.

Giving
the outlook for Takaful Post COVID 19, she stressed the following key points;

With a growing population of Muslims in Nigeria, there exists a huge market for
the product, with a continued public awareness… The Future is indeed Assured!
All Muslims & Non-Muslims need to ensure adequate plan and patronize
Takaful operators for all their insurance needs that will earn them surplus
where they record.
Post COVID-19, contextual and clear communication should be the norm. Insurers
must be more transparent than ever in their coverage and communication and
reinforce trust in the idea of true, hassle-free financial protection at the
time of need.

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