Mr Momodou Joof, Managing Director, Jaiz Takaful Insurance Plc, said on Wednesday that Takaful insurance was a means of deepening insurance penetration in Africa and ensuring financial inclusion.
Joof, said in Abuja while addressing newsmen that Takaful insurance was an Arabic word, adding that the system entailed people coming together and contributing for mutual benefit, for solidarity.
According to Joof, the contract of conventional insurance cannot be appreciated by Islam in the sense that if you pay premium and there are no losses, you do not get anything.
“In Takaful, if you suffer a loss, we settle your loss, if you do not suffer a loss, the profit generated by the pool contributed is given back to members who have contributed into that pool.
“The concept in Takaful is that the money is for the people and not the institution.
In the contract of Takaful, the insurance company takes 30 per cent of what is contributed by the participant for its management expenses.
He said that the remaining 70 per cent would be paid into a separate account known as the participant account, where claims and other settlements were paid from.
He said that after the payment of claims, the surplus, which formed the profit from the 70 per cent would be distributed to the participants at the end of the year.
Joof added that awareness and participation of insurance in Africa was very low but since the introduction of Takaful, many people had keyed into insurance.
“Part of the reason why participation is low has been blamed on some people shying away from insurance for reasons of religion where they say insurance is very close to gambling.
“Since the introduction of this concept, insurance participation has increased.
“This concept has been growing at the rate of 40 per cent annually as opposed to conventional insurance with a growth rate of five per cent per annum.
Joof reiterated that Takaful had not come into the market to compete with the conventional insurance but to cooperate with it to deepen insurance penetration in the country.
He commended the efforts made by the regulators in the sector and urged them to ensure speedy dispensation of insurance processes.
He said, “ the company was enlisted in 2014 and it took us till 2016 to get the licence to operate and not until the first quarter of 2017 to get product approval for general insurance.
On efforts the company was making to increase awareness, he said it already had three branches and in the nearest future, intended to have branches in all states of the federation.
He said the news conference was another way of ensuring awareness of the product and the company would not relent in ensuring awareness of the masses on the benefits of takaful.
“ We are leaving no stone upturned to ensure the necessary awareness and that is why you are here; we will use all the tools available to reach the entire nation.