Malam Sabiu Bello Abu-Bakr a seasoned insurance expert and the Executive Director of Operations and Training at Jaiz Takaful Insurance PLC In this interview explains what Takaful is all about.
What make Jaiz Takaful distinct from Conventional Insurance practice?
The concept of Takaful is built on Islamic doctrine called tahrawu, mutual assistance, which simply means coming together by some groups of people that agree to share their financial losses. Jaiz Takaful is offering everything conventional insurance companies do but in a different manner, because it is Sharia embodied. It has so many distinct benefits more than the conventional insurance. Conscious Muslims ordinarily will not want to patronize conventional insurance because it is believed it has haram contents and unethical, thus with Takaful, Muslims fear of involvement in haram matter is addressed. Also, under Takaful, your money belongs to you and not the operator. For instance, if you do not suffer any loss and there is a surplus because of Islamic ethics the money is shared to you at the end of the policy tenure. Similarly, Takaful pays promptly unlike conventional policy holders. Once a claim is genuine we settle it within two days. In our operations we have two distinct shariah compliant accounts one for the company where we have the service charge deducted, and the other which we call participants’ funds, where the premium are kept and await claims that may occur.
Can you throw more light on the surplus and profit sharing windows?
Actually Takaful is all about risk sharing, surplus sharing and profits sharing. In conventional insurance practice, it stops at risk sharing only, no surplus and profit sharing as it is available under Takaful. The surplus sharing is when the amount we set aside for loss is remaining after our losses have been settled and paid. What this means is that if three of us contributed into a common pool of fund with the intention that if we have loss, say for instance any of our car’s is stolen or involved in accident, that amount we kept will be used to alleviate the loss. But eventually if at the end of the contractual period one, two or three of us do not have any claim and there is a surplus of what remains in that common pool of funds will be shared accordingly. This is not obtainable in the conventional insurance market. Profit sharing occurs when we invest the surplus contributions of participants in income yielding instruments to get additional incomes. Takaful gives opportunities to participants to share such profits and thus make them happier than in conventional practice. Here it is you benefit from claims or you benefit from surplus or profit sharing, thus it is a win, win situation for our patrons.
How acceptable are your products amongst the Ummah?
Hardly do we visit any associations or organizations that we are not highly welcomed. In actual fact the enthusiasm and the zeal in people for our products are overwhelming. The acceptability reflect more in huge clientele that comes from transport sector participants There are many participants/clients on that corridor, and this is understandable because there are huge owners of vehicles in the country . The larger the portfolio is the larger the claims that would be received. We also have the family Takaful which in conventional insurance is called Life insurance policy. We cannot assure life because only Allah can do that. These two areas attract clients’ patronage from Muslims and non- Muslims. Actually our main focus is inclusive services in the sense that our service goes to the grassroots people. At the beginning we did a lot of campaign awareness across the country in order to have many grassroots people participating. Currently we have branches in Kano, Lagos, Kaduna and a unit in Port-Harcourt. We have products that are affordable to the masses. For instance all our family products are very cheap so we have no problem actually we have been penetrating, including acceptability amongst non-Muslims that are taking it because it is an inclusive services. Our clients range from small to medium and big companies, individuals and government agencies and commissions
What are challenges in the industry?
There are many fundamental challenges. But few will be sufficient. The newness of Takaful concept makes it difficult to market sometimes people even think it is about charity. Furthermore, how do we operate ethical concept of Takaful in an unethical business environment like Nigeria, it was difficult particularly, that Jaiz Takaful is a very small company competing with big companies and the premium charge in the industry of insurance is sometimes dictated by clients which the big companies can afford to pay because they have large clients but on our part we find it difficult we are currently struggling to remain in the business. Other operators, agents and financial providers also are part of the challenges. They find it difficult to relate to the Islamic principles that guide Takaful operations. These challenges shrink the profit available to us in the market of insurance but, Glory is to Allah, Jaiz Takaful is forging ahead despite these challenges.
What is the watch word for Jaiz Takaful?
The watch word for us in Jaiz Takaful is to bring policy holders back to status quo after suffering a loss; so that a relief would come for them. Here unlike the conventional insurance practice, we do not use the word premium, but contribution. We call it contribution because it indicates that it is your money. Premium connotes a charge while contribution is donation in such a way that it is very affordable based on risk involved.
Can you give a general advice to the Muslims?
My advice to fellow Muslims is for them to quickly subscribe to Takaful policy; it benefits more. It is all about planning for one’s life, family and other dependants financially, so that when the unexpected happens, one is not left empty. This is Islamic and it is a scientific way to live. Allah has given us wisdom and advice on how to guide against losses in advance so that one’s family is well-taken care of and assets secured; long before disaster strikes. Not everything is Qadr as some may want to think.