Niger insurance urges public to buy Takaful insurance products

The management of Niger Insurance plc has enjoined members of the insuring public to buy Takaful insurance products as part of efforts to imbibe savings culture.

The company’s Managing Director, Clinton Uranta, made this call during a chat with correspondents in Lagos.

Unlike the conventional insurance which majority of the Shariah scholars believe is unlawful due to involvement of Riba (interest), Maisir (gambling) and Gharar (uncertainty), Takaful, the Islamic alternative to insurance, is based on the concept of social solidarity, cooperation and mutual indemnification of losses of members.

It is a pact among a group of persons who agree to jointly indemnify the loss or damage that may be inflicted upon any of them, out of the fund they donate collectively. The Takaful contract so agreed usually involves the concepts of Mudarabah, Tabarru´ (to donate for benefit of others) and mutual sharing of losses with the overall objective of eliminating the element of uncertainty.

Uranta said the people should not see the takaful products as religious products especially as the bottom line is savings, which can either be savings for school fees, pilgrimage, house rent or any other thing.

While pointing out that takaful is not new to insurance industry globally as it is also being offered by many insurance companies globally, he said the product has been doing very well since it was introduced by Niger Insurance.

A large number of Takaful companies exist in the Middle East, Far East, Iran, Turkey, and Sudan and even in some non-Islamic countries. There are over 60 companies offering Takaful services in 23 countries around the world.

“In our own unique way, we have expanded the product in such a way that even non Muslims embrace it. But the bottom line is savings. Savings for school fees pilgrimage, house rent and what have you. That was how we modified it to suit our people in Nigeria. So you asked me whether it is doing well, it is doing well and we will continue to bring innovation into it to make it more attractive to the insuring public,” he stated.

Uranta also spoke on the branch expansion and restructuring programmes embarked upon by the company, saying the firm now has two additional regional offices in Sokoto and Yola to increase its total outlets to 45, while efforts are ongoing to open more new branches in the nearest future.

He also hinted that the insurance outfit has set a premium income target of N 12 billion for itself in 2011 based on the fact that the economy is on the recovery path, coupled with the fact that the company recently made new appointments and embarked on internal restructuring.

Niger Insurance Plc is a public quoted composite insurance company. The management team of the company is made up of trained, experienced and competent professionals with extensive management and technical skill.

Niger Insurance is fully computerised with the most advanced software technology. The computer network is capable of expansion and upgrading to meet with present and future increases in the volume of business.

The company has also put in place sound reinsurance treaties with local and foreign first class reinsurance companies led by Swiss Re. These comprehensive securities ensure financial stability and exude confidence in its service to both present and prospective customers.

Courtesy by; Vanguard

BNP’s Dalmau Discusses Challenges in Islamic Product Innovation

Rafael Dalmau, head of Shariah- compliant portfolio management at BNP Paribas in Singapore, discusses product innovation in an e-mailed response to Bloomberg questions.

On the drive for new products:

“The Islamic banking and financial sectors continue to evolve and part of that growth path involves the need to create new products. It is not always a lack of investment alternatives that motivate institutions to offer structured products. Many times, it is simply the need to keep pace with the demands of a more sophisticated client. Many of the traditional and basic definitions of Islamic financial transactions can be viewed already as structured products under conventional rules.

On setting standards for derivatives:

“The need to achieve global standards is not as urgent as thought of a few years ago. That is not to say, that it would not be useful and practical. There are still many challenges ahead of us before we can standardize Islamic derivatives. We, the market, need to define what it really means to have a derivatives market and whether or not, these transactions comply both in letter and spirit with Shariah principles.

“All market participants need to make clear what are the objectives behind the creation of Islamic derivative transactions? Are they going to be used simply to leverage or speculate on other Islamic markets, or are they going to be used for purposes of risk management? They can be abused as we saw in the recent times in the conventional markets.”

On the role of Islamic scholars:

“The scholars are going to be, and should be, the main drivers in the evolution of the Islamic derivatives markets. If there is ever an Islamic derivatives market that may allow more efficient risk management, it is likely to help in the growth of the Islamic capital markets. We are still far away from that point.”

Courtesy by: Bloomberg