Aminu Tukur, Vice Chairman of Noor Takaful, discusses the unique aspects of Takaful, its challenges, and its potential to reshape the Nigerian insurance landscape. Takaful differentiates itself from conventional insurance through its core operating principle – a contract of donation rather than sale. Participants contribute to a shared pool of funds, fostering mutual support and risk-sharing. Unlike conventional insurance, where funds become company assets, Takaful maintains participant ownership of the pool. This structure allows for surplus distribution to participants who haven’t filed claims, emphasizing equity and fairness over pure profit. This model aligns with Sharia principles, attracting individuals who seek ethical and religiously compliant financial solutions.
Initially, Takaful faced the challenge of acceptability, particularly among non-Muslims who perceived it as a faith-based product. However, Noor Takaful strategically focused on the inherent value proposition of fairness and ethical practices, successfully demonstrating its appeal beyond religious lines. A significant portion of their clientele now comprises non-Muslims, showcasing the broader appeal of this equitable model. Consistent surplus distribution over the past five years, coupled with prompt claim payments, has further bolstered trust and confidence in the Takaful model, contributing to its rapid growth and the emergence of additional Takaful operators in Nigeria.
Noor Takaful holds the distinction of being Nigeria’s first full-fledged composite Takaful operator. The company prioritizes swift claim settlements, a key factor in building confidence within the insurance sector. This commitment aligns with regulatory efforts to enhance trust in the industry. Tukur also highlights the company’s focus on innovation and financial inclusion, particularly targeting the Muslim demographic and the younger generation who may find traditional insurance complex. The launch of Raha by Noor, a digital solution, aims to simplify and increase access to Takaful, extending its reach across different demographics and geographic locations.
Expanding further on financial inclusion, Tukur emphasizes the significance of micro-Takaful, a recent initiative sanctioned by the National Insurance Commission (NAICOM). This program offers accessible and affordable Takaful products, catering to individuals with limited financial resources, such as market traders and small-scale farmers. With premiums as low as N500, micro-Takaful provides coverage for goods, assets, and health, mitigating risks associated with fire, theft, flood, and other unforeseen events. This strategy prioritizes the needs of vulnerable populations, recognizing their greater dependence on insurance due to their limited fallback options. By catering to this segment, Noor Takaful aims to foster upward economic mobility, contributing to broader economic growth and stability.
Noor Takaful obtained its micro-Takaful license in late 2024 and is preparing to launch products that offer comprehensive coverage for a nominal fee. The aim is to provide affordable protection to vulnerable groups like market traders and small-scale farmers, whose livelihoods are often precarious. The company plans to leverage its digital platform, Raha by Noor, and community networks to distribute these products, minimizing marketing costs and enhancing accessibility. This long-term strategy prioritizes social impact over immediate profit, aiming to build a loyal customer base and contribute to the overall economic upliftment of the population.
Beyond its own initiatives, Noor Takaful actively participates in promoting Islamic finance in Nigeria. Tukur expresses optimism about the growth of Islamic finance in the country, citing the successful issuance of sovereign Sukuks (Islamic bonds) and the emergence of Islamic banks. He advocates for clearer terminology, preferring “Islamic finance institutions” over “non-interest banks” to accurately represent the broader scope of this financial system. He underscores the importance of listing more Islamic finance companies on the Nigerian Stock Exchange to increase investment opportunities and market liquidity. He also highlights Noor Takaful’s role in hosting the African Takaful and Non-Interest Finance Conference, a platform for fostering dialogue, knowledge sharing, and innovation within the Islamic finance sector. Looking ahead, Noor Takaful’s vision extends beyond Takaful, aiming to become a leading ethical financial institution in Africa, expanding its services while upholding its core values of fairness and social responsibility. The company plans to continue its expansion into other financial sectors, initially focusing on healthcare, while contributing to the broader goals of financial inclusion and sustainable economic growth in Nigeria and across the continent.
