Takaful (Islamic insurance) practices - Challenges and prospects in Nigeria
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Date
2015
Authors
Fadun, O. S.
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Abstract
The concept of insurance evolves from mutual help in times of need and distress, rather than a business proposition for profit making as practised today. In conventional insurance, the relationship between the insurer and the insured is that of buyer and seller. This is not the case with Islamic insurance (takaful). Takaful promotes shared responsibilities, solidarity, mutual assistance and cooperation to protect participants (policyholders) against risks and misfortunes in accordance with the policy. Hence, profit is not the main objective of takaful. Takaful practices in Nigeria are relatively new. The publication of Takaful Operational Guideline (2013) in Nigeria implies a new era for takaful practices in Nigeria. The study examines takaful challenges and prospects in Nigeria. It considers conventional insurance and reasons conventional insurance is unacceptable in Shariah. It also explains meaning, elements and key features of takaful; outlines how conventional insurers and takaful operators can make profit; highlights major differences between conventional insurance companies and takaful companies; explores takaful companies’ challenges and hitches/bottlenecks to takaful practices in Nigeria.
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Fadun, O. S. (2015). Takaful (Islamic Insurance) practices: Challenges and Prospects in Nigeria. Journal of Risk and Insurance Practice, 1(1), 12-28.