Sub Saharan Africa represents the greatest growth potential for takaful, with Muslims making up more than 30% of the population, says the Islamic Financial Services Industry Stability Report 2019 released last week by Kuala Lumpur-based Islamic Financial Services Board (IFSB).
The report points out though that takaful operations are still insignificant in Sub Saharan Africa, with the contributions estimated at $10.2m in 2017. Contributions are mainly from Kenya, Nigeria and the Zambia.
Outlining Islamic insurance developments in the region, the report says that Kenya recently introduced draft takaful-specific guidelines, and countries such as Tanzania, Zambia and Mozambique are taking similar steps.
Takaful Insurance of Africa, the only Shariah compliant insurer in Kenya, was established in 2011. In 2017, in Kenya, contributions from microtakaful business grew to $2.53m, the fastest recorded in this business segment in Kenya.
In Tanzania, following the implementation of an Islamic insurance regulatory framework, three applications for takaful operating licences are currently being vetted by the insurance regulator. The introduction of Islamic insurance in Tanzania is expected to promote the growth of Islamic banking, as well as help to increase insurance penetration.
In Nigeria currently, there are five takaful operators, two of which are full-fledged (Jaiz Takaful and Noor Takaful) and three takaful windows operating in Nigeria, including takaful windows, after the country’s insurance regulator issued takaful guidelines in an effort to deepen insurance penetration.
Takaful is springing up in other African countries such as Gambia, Mauritania, Senegal and South Africa.
A new Islamic insurer has been established in Somaliland, backed by some of Africa's largest players in the insurance industry. The new company called Horn of Africa Insurance offers motor, property, medical and marine insurance along Shariah rules.