Nigeria’s insurance regulator is making a fresh push to expand Takaful insurance, betting that the alternative risk-sharing model could bring millions of underserved Nigerians into the formal insurance market.
The National Insurance Commission said it is stepping up efforts to harness the potential of Takaful as part of a broader strategy to deepen insurance penetration, strengthen financial inclusion and support sustainable economic growth.
The Commissioner for Insurance and Chief Executive Officer of NAICOM, Olusegun Omosehin, disclosed the renewed commitment following a high-level Diagnostic Assessment Mission of Nigeria’s Takaful sector conducted by a delegation from the Islamic Financial Services Board.
The assessment could mark an important step in reshaping the regulatory environment for Takaful in Nigeria.
NAICOM wants Takaful treated as more than a niche product
Omosehin said Takaful should be viewed as an alternative insurance model rather than merely a small segment of conventional insurance.
The approach could allow the industry to reach a broader range of consumers while operating within established Shariah governance principles.
For Nigeria, where insurance penetration remains relatively low, the regulator sees Takaful as another potential channel for bringing previously uninsured individuals and businesses into the insurance ecosystem.
Rather than competing only for existing insurance customers, the model could help expand the overall market.
Regulatory overhaul could be coming
The IFSB assessment identified potential measures for strengthening Nigeria’s legal, regulatory and supervisory framework for Takaful.
NAICOM is now asking the delegation to provide practical, data-driven recommendations that can feed into ongoing regulatory reforms.
Among the areas highlighted by the commissioner are risk-based capital requirements, supervisory frameworks, data transparency and prudent management of surplus.
These measures are intended to protect participants while creating a more sustainable foundation for the growth of Takaful operators.
Why the move matters for Nigeria’s insurance industry
The renewed regulatory attention comes as Nigeria seeks to expand insurance coverage and make products more accessible to a much larger segment of the population.
Takaful could offer another route to that objective by providing an insurance structure based on risk-sharing and Shariah principles.
NAICOM believes a stronger regulatory framework could also improve consumer confidence, strengthen policyholder protection and encourage responsible innovation.
The commission said its collaboration with the IFSB represents a significant milestone in building what it described as a more robust and resilient Takaful ecosystem.
A new opportunity after insurance recapitalisation
The push also comes at an interesting time for Nigeria’s insurance industry, which has recently undergone a major recapitalisation exercise.
With insurers strengthening their financial capacity, attention is increasingly shifting towards finding new customers, developing innovative products and expanding insurance penetration.
Takaful could become one of the avenues through which insurers pursue that growth.
For operators, however, regulatory clarity will be crucial. A stronger supervisory framework could help ensure that expansion does not come at the expense of consumer protection or financial stability.
Full assessment report still pending
NAICOM said the preliminary findings from the Diagnostic Assessment Mission have already pointed to measures that could improve the sector, but the full report has not yet been released.
The final document will be issued after the findings are reviewed and feedback from relevant stakeholders incorporated.
Until then, the industry will be watching closely.
If the proposed reforms translate into clearer rules, stronger supervision and greater confidence among consumers and operators, Takaful could move from being a relatively specialised part of Nigeria’s insurance landscape to a significant driver of the country’s financial inclusion ambitions.
