‘Takaful, viable alternative to conventional risk management’

‘Takaful, viable alternative to conventional risk management’

A Professor of Insurance at the University of Lagos (UNILAG), Tajudeen Yusuf, has called for an ethical repositioning of Nigeria’s insurance industry and the full integration of Takaful as a viable alternative to conventional risk management models.

Delivering the 13th Inaugural Lecture of the 2024/2025 academic session of the university titled; Risks, Ethics and The Road Less Taken: Navigating the Journey Between Insurance and Takaful, Prof Yusuf stressed the urgent need for reforms to improve Nigeria’s insurance penetration, especially among financially excluded populations.

The event, held at the J.F. Ade-Ajayi Auditorium, UNILAG, marked a milestone for the Department of Actuarial Science and Insurance, being the fifth in its history and the first by a member of the Insurance Unit.

Prof Yusuf, a pioneering authority in Takaful and non-interest finance, lamented Nigeria’s reactive approach to disaster risk management, citing incidents such as the 2008 Budu OSP oil spill, the 2024 Majiya fuel explosion, and the 2025 Zamfara Islamic school fire, which claimed multiple lives and exposed glaring institutional weaknesses.

“The Nigerian state has often responded to disasters rather than preparing for them,” Yusuf said, noting the devastating impact of inadequate regulations, poor safety enforcement, and the near absence of insurance coverage in public institutions. “There was no mandatory fire insurance policy for that school,” he added, referencing the Zamfara tragedy that led to a prolonged fire outbreak and public outcry.

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According to him, Takaful aligns with Shariah principles and offers a culturally compatible path to deepening financial inclusion among Nigeria’s underserved Muslim population.

“Nigeria needs to stop treating Takaful like conventional insurance. It is different and it must be regulated differently. With just one Takaful operator in 2003, we now have up to six, growing at 15 to 20 per cent annually. That shows promise. My lecture is a wake-up call to the sleeping giant called Takaful”, he added.

The professor urged regulators to broaden support for ethical insurance models, citing the failures of conventional insurers during recent high-profile cases like the Lagos COVID-era Jeep Shiroki crash and the CBEX Ponzi saga.

He also warned against Ponzi-style ventures parading as faith-based investments, describing them as “facades of morality” that exploit trust without regulatory accountability.

“In the name of sustainable returns, people lose their life savings. We must insist on transparency, ethical conduct and stronger governance in the financial system,” he said.

He appealed to government, regulators, insurers, and faith-based institutions to “take the road less taken” by mainstreaming ethical insurance and investing in Takaful as a transformative tool for national development.

In her remarks, the Vice Chancellor of the University of Lagos, Prof Folasade Ogunsola, described the lecture as a profound interrogation of the Nigerian insurance landscape.

 

‘Takaful, viable alternative to conventional risk management’