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5 Top Reasons Why Nigerians Oppose Islamic Insurance

  • The principles and operations of Takaful Insurance are solely based on Islamic injunctions with the purpose of being Shariah compliant.  Hence, adherents of other faiths believe that by taking part in it, they are taking on another faith. As Deacon Ladipo Ajayi, Managing Director, LASACO Assurance Plc puts it : “You have to believe in that religion, you have to believe in the teachings of that religion otherwise there are some things an irrational person will do that will become un-Islamic or antithetical to the success of Takaful”
  • Some believe that the terms used by the Takaful operators are foreign and difficult to comprehend.  Most people who oppose Takaful insurance wonder why only Arabic terms are used to label the products being offered. For instance: Premium is called ra’s-ul-mal and Tabarru- which means the  portion of the takaful monthly contributions which the contributor voluntarily forfeits should any of his fellow participants suffer a defined loss .
  • Takaful has religious coloration which makes it contentious  especially in Nigeria where religion is a bone of contention.  So, it automatically evokes passion and creates tension
  • Labeling it as Islamic Insurance limits people who would embrace it. It would have been better to label it ethical insurance to make it more inclusive since all faiths share the concept of risk sharing
  • Some have also argued that the principle on which Takaful is based is an affront to that of commercial insurance and that it places a weight of morality on Muslims.  According to this school of thought, Takaful is about risk sharing, what happens the policyholder switches to another insurance company where he would be able to share profit, leaving a company (now in loss situation) where he had previously shared profit? Is it morally right? Won’t this defeat insurance principle since we all know that fluctuation does arise in insurance operations?


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