GOODWILL MESSAGE BY MOHAMMED KARI, NATIONAL COMMISSIONER FOR INSURANCE AND CHIEF EXECUTIVE OFFICER, NATIONAL INSURANCE COMMISSION (NAICOM) AT THE FORMAL LAUNCHING CEREMONY OF THE KANO BRANCH OF JAIZ TAKAFUL ON MONDAY, OCTOBER 30, 2017
It gives me great pleasure to be here this morning to witness the launching of the Kano branch of Jaiz Takaful. I commend the Board, Management and staff of the company for achieving this feat within the short period of its existence. On behalf of management and staff of the National Insurance Commission (NAICOM), I congratulate you for your drive and the commitment to expand your business by making forays into new markets beyond the Abuja – Lagos markets.
The Commission is elated at this positive development which is a bold step towards the growth and development of the Takaful market in Nigeria. As we all may already be aware, Kano is the commercial hub of northern Nigeria with a massive population that is financially excluded and in particular, largely uninsured. Your choice of Kano for a branch office is therefore not a mistake but a good business decision that must be applauded.
Suffice it to say that a huge market of potentials awaits you in Kano and indeed, the entire northern Nigeria where majority of the people have great risk exposures that are not covered by any form of insurance. We are in no doubt that by the nature of Takaful, you would have little or no difficulties in penetrating the market.
Ladies and Gentlemen, the journey to this historic gathering started as an initiative by NAICOM to complement the efforts of the Financial System Strategy 2020 (FSS2020) as part of the Financial Inclusion initiative aimed at reaching the larger percentage of Nigerians that are unreached and thus, financially excluded. Studies did show that majority of this segment of the population, which is the lower end of the population have no access to any financial services, insurance inclusive.
Attempts by the Commission and the insurance operators to penetrate this market with the conventional insurance products have not yielded the much desired result due to a number of challenges arising from public apathy to insurance, religious and cultural beliefs. Even the compulsory classes of insurance made mandatory by law for every Nigerian to undertake are still being resisted by both government and people especially in this part of the country due to the challenges I have earlier mentioned.
In recognition of the public apathy to insurance, the Commission in line with the desire to deepen insurance penetration in the country, developed a medium-term initiative code-named “Market Development and Restructuring Initiative” MDRI, to amongst others, promote public understanding and confidence in the insurance industry. The initiative was also aimed at creating awareness of certain vital insurances made compulsory by law for the protection of innocent third parties. Such compulsory insurances included motor third party, group life, professional indemnity, builders’/occupiers’ liability and public building liability insurances.
While certain level of success is being achieved gradually in this regard, the Commission introduced Takaful and Microinsurance products in the Country as an attempt to reach the segment of the market that is either hitherto reached or not comfortable with the conventional insurance products. So far, two wholly Takaful companies have been licensed to operate by the Commission while the processing of other applications is on-going.
The development of Takaful operations in Nigeria could not have been achieved without the provision of an enabling framework for its takeoff. The Commission in collaboration with development partners such as Enhancing Financial Innovation & Access (Efina) and GIZ developed and released the Takaful Insurance Guidelines in November, 2013 to enable smooth operation.
Consequently, in March, 2015 the Commission inaugurated the Takaful Advisory Council of Experts (ACE) saddled with the responsibility of review, endorsement of policies and guidelines related to the principles underpinning Takaful insurance operation. The ACE is made up of eminent scholars with deep knowledge of Islam and Sharia.
Takaful is both ethical financing and cooperative risk protection methods that are superior alternatives, because they reinvigorate human capital, human solidarity, emphasize dignity, community self-help and economic self-development, generating manifold benefits which appeal not only to Muslims but all. I encourage the people of Kano to embrace it for their protection against risks.
I congratulate you once more and wish you successful business operations in Kano. We are optimistic that your presence in Kano will in no distant time aid the penetration of insurance in Nigeria and subsequently lead to a substantial leap in the contribution of insurance to the nation’s Gross Domestic Product (GDP).
Commissioner for Insurance, Nigeria