Takaful Insurers have appealed for patronage of registered insurance brokers to deepen takaful and micro insurance penetration in the country.
The operators, who gave the appeal at the maiden edition of the Nigerian Council of Registered Insurance Brokers(NCRIB) Mid-Year Workshop on Takaful and Micro Insurance held at NCRIB secretariat in Yaba, Lagos recently, noted that, the cash-back mechanism in takaful Insurance make it the best coverage everybody, including Muslims and Christians must subscribe to.
On his part, the executive director, Business Development and Strategy, Salam Takaful Nigeria Limited, Dr. Nurudeen A. Liman while discussing, ‘How to increase and strengthen your company’s client base with Takaful & Micro Insurance,’ noted that, Takaful is a co-operative system of reimbursement or repayment in case of loss, organised as an ethically compliant alternative to conventional insurance, which Takaful proponents believe contains usury and excessive uncertainty.
Takaful, he added, is a type of insurance wherein members contribute money into a pool system to guarantee each other against loss or damage while Takaful-branded insurance is based on the belief that individuals are responsible to cooperate and protect one another.
Saying the core of Salam Takaful business model is its continued commitment to being more than an Insurance company but to ethics and contributing to the wellbeing of not only its participants but to society at large.
The managing director/CEO of Hilal Takaful Nigeria Limited, Alhaja Thaibat Adeniran, stressed that, the aim of Takaful Plan is to provide a substitute for conventional insurance which is perceived as containing elements of Uncertainty (Al- gharar), gambling (Al-maisir) and Interest (Al-riba), adding that, these elements are considered as unlawful (haram) in Islam.
In a Takaful arrangement, she said, the participants contribute a sum of money as a Tabarru (Donation) into a common fund, which will be used mutually to assist the members against a specified type of loss or damage.
Explaining further, he said, “An operator is engaged to manage and administer the contributions (Risk Fund). The Takaful model provides for Risk Sharing as against Risk Transfer. Takaful (Islamic Insurance) is a policy of mutual co-operation, solidarity, common interest, shared responsibilities, joint indemnity and brotherhood against unpredicted risk or catastrophes, in which the participants involved are expected to contribute genuinely. Takaful is based on the Islamic commercial profit / loss sharing principle of ‘Al- Mudharabah Tabarru,’ which means, to donate, to contribute, to give away.
“Hilal Takaful is here with alternative financial management services with affordable takaful (insurance) cover that has the full capacity to enhance growth of businesses and ensure stability, she added that, Takaful (Insurance) is a product you buy when you think you don’t need, but you will need when you can’t buy. Now is the right time for you to pick up a policy to guaranty your business growth and stability.”
Similarly, the managing director/CEO, GOXI Micro-Insurance Co. Limited, Mr. Shina Gbadegeshin, speaking on ‘Designing and Developing Sustainable Microinsurance Products’ noted that, micro-insurance, as a form of insurance, is developed for low-income populations, with low valued policies provided by licensed institutions, run in accordance with generally accepted insurance principles and funded by premiums.
“Microinsurance products are insurance products that are designed to be appropriate for the low-income market, low valued policies, micro and small-scale enterprises in relation to cost, terms, coverage, and delivery mechanism,” he stressed.
Explaining that the Sum Insured under a Microinsurance policy(ies) shall not be more than N2million per person per insurer, he addded that, Microinsurance policies shall exclude special risks insurance, motor insurance (except tricycles and motorcycles), professional indemnity and other pecuniary risks with sum insured higher than N2million.
“All third party liability risks and all other classes of risks with sum insured above N2million are also excluded even as all compulsory insurances on third party liability risks excluded from microinsuance shall be underwritten by a Conventional Insurer.
Urging micro insurers to always design products from customer’s need, he urged them to empathise with the main challenges and needs of low-income customers and to develop holistic solutions, while advising micro insurers to first do their homework and build a deep understanding of customer needs.
Microinsurers, he said, need to build holistic insurance solutions, saying, for microinsurance clients, insurance should be conceived primarily as an assistance.
To him, “The premium you can charge to low-income clients is limited and will not suffice to cover an entire loss. Build affordable solution that complement other services or product.”
To build positive claims experience in the heart of their clients, he urged them to be there in time of needs, saying, microinsurance requires a radically different approach to how claims are reported and processed.
“Claims need to be paid in a matter of hours or days, not months after an incident occurs. Equally important is to design microinsurance solutions for high-claims frequency and if people never make a claim, they will never experience the value of insurance.
“Think of claims not as a cost but as an investment in the future of the business and an opportunity to demonstrate the value of insurance. A smooth and swift claims process can be an engine of growth and one of your best ‘advertisements’ as word-of-mouth travels fast in connected communities.
“In fact, many people who have not experienced insurance before will trust these word-of-mouth recommendations from community members far more than any company ad. And this in turn will build your reputation as a trusted insurer to attract new partners,” he advised.
Speaking on the motive of the seminar, the president, NCRIB, Barrister Rotimi Edu said, having realised the knowledge gap in the area of Takaful and Micro Insurance business, in spite of the huge potentials, the council has been magnanimous enough to coin this maiden edition around the subject of Micro Insurance and Takaful.
The choice of the theme: ‘Exploring Huge Potentials of Takaful & Micro Insurance,’ he stressed, could not have been timelier, considering the fact that the registration of Takaful and Micro Insurance firms by the National Insurance Commission(NAICOM) was to achieve the 40 per cent financial inclusion target in the insurance industry.
“The Commission had disclosed that it had planned programmes to promote the Takaful and Micro Insurance. In my opinion, the best response by any Insurance Broker is to plug in to the NAICOM planned programmes, hence, the benefit of this training.
“Permit me to note that the objective of this value adding Workshop amongst others is to educate participants on the essentials of Takaful & Micro-insurance and the different products available under the classes of Insurance. It would also enlighten members on how to increase and strengthen the company’s client base,” he pointed out.
