The Prospect of Introducing Islamic Insurance (Takaful) Products and Services in Secular Economies like Nigeria

Abstract

Generally, the area of Islamic Insurance is new especially in economies like Nigeria where, to the best of the authors’ knowledge this paper is one of the few, if any, that investigates the acceptance and performance of Islamic Insurance (Takaful) in Nigeria. However, Islamic Insurance (Takaful) Products and Services are facing some challenges in Nigeria in terms of awareness and acceptability based on the some controversies of scholars of the past on its permissibility while based on some data generated, the percentages of the customers choosing Takaful products in the country are increasing over the time and therefore, a call to find out if the introduction of Takaful products and services prosper in Secular Economies like Nigeria. The paper used both descriptive approach which comprised the use of frequencies and percentages and inferential analysis which involved the use of Chi-square test, and Logit Model. The results revealed that Islamic Insurance (Takaful) can operate and perform in a Secular Economies like Nigeria while the challenges militating against the development of Islamic Insurance (Takaful) in Nigeria include the legal and regulatory guidelines of the National Insurance Commission (NAICOM), institutional and administrative factors, religious, culture, and unawareness. The practical implication of the results is that Takaful can operate and performed in a secular economy like Nigeria but some challenges such as the legal and regulatory guidelines of the NAICOM, institutional and administrative factors, religious, culture, and unawareness are still holding it back.