NIGERIA – The National Insurance Commission (NAICOM) has granted approval in principle to Cornerstone Takaful Insurance Company Limited and Salam Takaful Insurance Company Limited.
Both companies were given approval as Composite Takaful operators to transact both family and general Takaful business in Nigeria.
A statement from the commission said the approval in principle to the two new companies was in line with its drive for increased insurance penetration in the country.
This new development brings the total number of wholly takaful operators to four as the regulator had in 2016 granted licence to Noor Takaful and Jaiz Takaful.
The commission revealed that the final operating licence would be issued to the companies upon provision of evidence of conducive business environment at their head offices.
Possession of an appropriate information technology infrastructure and appointment of a head of information technology are the other two requirements that the companies must meet before being given the final operating license.
Takaful is a type of Islamic insurance where members contribute money into a pooling system in order to guarantee each other against loss or damage.
It is based on the Islamic principle of Taawun or mutual benefits.
The insurance is similar to conventional insurance in that it collects a customer’s money for premium on his insurance.
However, unlike conventional insurance which does not offer anything if there is no loss, the profit generated by the insurance pool is given back to those who didn’t suffer any loss during that particular year.
Its unique nature has made it to be attractive to most Nigerians.
According to Momodou Musa Joof, the takaful insurance sub sector was growing faster than conventional insurance.
It generated N100 million in premium income in the last four months, representing a 30 to 40 per cent per annum while conventional insurance is growing at five per cent annually.