NAICOM plans to adopt Malaysia’s Takaful model

Joy Agwunobi 

The National Insurance Commission (NAICOM) has expressed interest in studying the Malaysian Takaful insurance model as part of its efforts to enhance Nigeria’s Takaful insurance market.

The Commission highlighted the importance of knowledge sharing between Nigeria and Malaysia in key business and investment sectors.

This announcement came during a courtesy visit by Aiyub Omar, the Malaysian High Commissioner to Nigeria, to NAICOM’s headquarters in Abuja. Olusegun Ayo Omosehin, the Commissioner for Insurance and CEO of NAICOM, commended Malaysia’s success in the Takaful insurance sector over the past three decades.

Omosehin expressed a keen interest in learning from Malaysia’s achievements in the development of Takaful insurance and called for further collaboration with the Malaysian government. The collaboration will focus on two key areas: capacity building and creating investment opportunities.

Omosehin suggested that studying countries with similar characteristics to Nigeria, such as Malaysia, would help identify best practices and successful strategies. “By exploring international models and benchmarking against industry leaders, NAICOM aims to create a more conducive environment for insurance growth in Nigeria,” Omosehin said. He added that such efforts would ultimately benefit both policyholders and stakeholders.

Emphasising the potential of the Nigerian insurance market, Omosehin pointed to the country’s low insurance penetration and significant growth opportunities. He noted that Nigeria’s Takaful insurance sector, which began with just one company in 2013, now includes six companies under NAICOM’s regulation.

“We have made progress, but there is still substantial room for growth and investment,” Omosehin stated, underscoring the importance of strategic partnerships and knowledge sharing to accelerate Nigeria’s economic development. He also referenced President Bola Tinubu’s vision for a $1 trillion economy, which, he said, could be achieved through collaborations with foreign governments, including Malaysia.

Omosehin also discussed the recently passed insurance bill, which awaits approval from the House of Representatives. He explained that the bill is designed to enhance the regulatory framework, boost capital in the insurance industry, and create new investment opportunities. “The bill seeks to promote the growth and development of the insurance sector, contributing to Nigeria’s broader economic growth,” he added.

On his part, Aiyub Omar, the Malaysian High Commissioner to Nigeria, expressed enthusiasm about the potential for collaboration. He highlighted Malaysia’s expertise in Takaful insurance, emphasising its success in contributing to the country’s Islamic finance sector.

Omar pledged to help facilitate connections between Malaysian Takaful insurance companies and Nigerian stakeholders, fostering further investment and cooperation. He also proposed a capacity-building program aimed at enhancing the regulatory skills and knowledge of NAICOM staff.

“This partnership could leverage Malaysia’s experience in Takaful insurance, which has significantly contributed to the growth of our Islamic finance sector,” Omar said, adding that  the training program will further strengthen NAICOM’s regulatory capacity and add value to Nigeria’s insurance industry.