Diversification of Islamic Financial Insturments
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Sovereign Sukuk, (ii) public awareness and (iii) delayed issuance by the Central Bank of
Nigeria of the Sukuk liquidity status guidelines. Diversification through Sovereign Sukuk
issuance has the potential of engendering financial inclusion as well as attracting significant
amounts of affordable capital from the Gulf countries and other established Islamic markets
around the world into Nigeria and these are part of cardinal objectives of Government which
will further result into more Sovereign Sukuk issuance.
3.1.5 TAKAFUL (ISLAMIC INSURANCE) IN NIGERIA
The Takaful institutions in Nigeria comprised of two full-fledged Takaful companies (Jaiz and
Noor Takaful Insurance) and two Takaful windows of conventional insurance companies
(Niger and African Alliance Insurance) and a Takaful division of Corner Stone Insurance. The
Takaful segment of Islamic finance in Nigeria is not as vibrant as the Islamic Banking segment
as the two full-fledged Takaful companies were expected to have commenced operations
during the first quarter of 2017.
The contract of Takaful as a business venture in Nigeria is mainly based on the hybrid
principles of Islamic profit sharing of Mudarabah and Agency (Wakala) contracts.
The Takaful institutions provide both general and family takaful insurance services. According
to the Managing Director of Jaiz Takaful insurance, the General Takaful insurance products
offered includes; Motor Takaful: (Comprehensive, Third party, Fire & Theft and Third Party
only); Fire and Miscellaneous accident Takaful: (Fire & Allied Peril, Burglary , All risks, Fidelity
Guaranty, Public liability, Group personal accident, Goods in transit, Money Takaful,
Professional indemnity); others are Engineering Takaful: (Contractor’s plant and machinery
Contractor’s all risk, Machinery breakdown, Electronic equipment); Marine Takaful: (Marine
Cargo & Hull), while the Family Takaful as listed by Noor Takaful28 includes: Education Plus
Family Takaful, Provest Family Takaful, Flexip Family Takaful, Group Mortgage Family Takaful,
Group Family Takaful, Hajj and Jerusalem Family Takaful, Enchart Family Takaful, Mortgage
Takaful, Prosave Family Takaful and Mortsave Family Takaful. These products provide benefits
to participants ranging from protection, investment to savings and they operate mainly on the
basis of Mudharaba and Wakala. The three (3) conventional insurance companies that have
Takaful windows and division also offered similar products to the ones offered by the full-
fledged Takaful companies, however, the African Alliance Insurance has a very robust
Takaful29 arrangement when compared to the other two (2) Windows30.
The performance of Takaful insurance in Nigeria can only be analyzed by comparing the
performance of the Takaful products offered by the conventional insurance companies vis-à-
vis the performance of the conventional insurance products since the two full-fledged Takaful
insurance companies became operational only in the first quarter of 2017 and as such there
are no operating results for analysis and comparison.
28 Family Takaful products listed by Noor Takaful available the website
29 African Alliance Insurance website: Takaful products offered as at March 2017. Available at
30 Cornerstone Insurance website: Takaful products offered. Available at:
=, Niger Insurance website: Takaful Products offered. Available at: