Regulator to speed up Takaful policy

The insurance regulator has committed to hasten the completion of a Takaful framework to ensure growth of the market segment.

The move comes against the backdrop of rising demand for Takaful products among the Muslim population, with the sub-sector’s contribution globally projected to surpass $20 billion (Sh20 trillion) by the end of this year.

Insurance Regulatory Authority’s (IRA) Supervision Officer Eric K’Omollo speaking at the recent third Islamic Insurance Conference in Nairobi said the Takaful framework would be gazetted soon.

"As a regulator, we look at Takaful as a new business model in the industry with potential customers across Kenya hence our continued efforts to ensure that the framework is fully complete and gazetted soon in order to allow for the growth of Takaful products in the country," he said.

The two-day conference was organised by Kenya Reinsurance (KenyaRe).

It highlighted various strategies to unlock the potential for Takaful and Retakaful business in Africa.

Takaful is an Islamic insurance concept requiring the negative impact of a specific incident be spread among a group of persons instead of one person bearing the losses alone. Retakaful is the Islamic version of conventional reinsurance.

Onyango said IRA had developed an insurance lab and sandbox that would encourage innovation in the insurance sector and also deepen penetration.

KenyaRe Managing Director Jadiah Mwarania noted that the market demand for Takaful products among the Muslim population in Kenya is growing.

"The gap has been witnessed with huge numbers of Muslim population not having access to Islamic insurance products," he said.

He said despite the potential, many markets lack standards and guidelines to act as a benchmark for new and existing Takaful and Retakaful providers.