There is a popular saying that you can’t profit from insurance. Yes, under the conventional insurance, you can’t and if you do as a policyholder, you have committed a crime worthy of heavy sanction.
But in Takaful Insurance, popularly known as Islamic Insurance, you can actually profit from it.
The modus operandi of Islamic(Takaful) insurance looks appealing as it guarantees profit sharing between the insurer and the policyholders, a trait that is absent in the conventional insurance business as the conventional insurer takes the whole profit made from its investment.
It follows a specific Shariah-compliant model, wherein any claim will be paid from the pool fund contributed by the participants.
Unlike in conventional insurance where individual buys insurance coverage from an insurance company solely as a personal security plan, in Islamic insurance, participants, which are policyholders, contribute funds into a takaful pool and mutually guarantee financial assistance to each other.
This is where businesses can gain from insurance. Here, if you buy a policy from takaful insurance company and whether you lodge a claim or not, you still have opportunity to share from Surplus distribution.
Invariably, it means you cannot lose money in Takaful insurance. In this instance, you are assured that whatever happens to your business, you will be paid claims, and even if nothing happens, you still get part of your money through surplus distribution mechanism.
Speaking on this development, a Director in the National Insurance Commission(NAICOM), Mr. Pius Agboola says: “it is a concept that preaches sharing of risks and profits. One of the objective of this insurance is to encourage savings. So, it’s a programme that have short and long term perspective. Short term perspective, because within one year, whether you have claims or not, you still share from the profit. And long term perspective is that anytime you have loss, once you are a member of that scheme, one to 10 years time, you still benefit from it.”
An expert, Amb. Shuaibu Ahmed, says: “n Takaful Insurance, claims are paid, and whatever that is left, some part of it comes to insurers. It is like mutual assurance, where a form of participants comes together and put funds together. At the end of the day, it’s their money, not insurance firm’s money. Once claims are paid to some participants that record some calamities, whatever balance left in that funds belongs to participants(policyholders)”
The vice chairman, Noor Takaful Insurance Limited, Aminu Tukur, states that, the surplus distribution comes as the redemption of pledge to policyholders, noting that, Takaful insurance has become highly receptive among Nigerians over the last few years.
The managing director, Lotus Capital Limited, Hajara Adeola, says, Takaful insurance, a non-interest finance, remains the best alternative insurance for the generality of Nigerians as it helps to promote financial inclusion.