An Assessment of Acceptance Rate of Digitalization of Takaful Insurance Industry in Nigeria

Abstract

This study analysed the level of acceptance of digitalization of Takaful of insurance industry in Nigeria, with specific focus on consumer engagement and retention within insurance industry with cutting-edge technologies such as mobile apps and social media (Instagram, Facebook and Internet). Digitalization offers numerous benefits but pose some concerns like data privacy and information overload, which may hinder the engagement efforts unless carefully dealt with. The study used the qualitative approach by interviewing experts, practitioners, consumers and stakeholders in the Islamic finance industry. This approach enables the collection of information and insights about the views and experiences of the agents involved in the process of implementing and practising the ethics of digitalization in Islamic insurance. The findings revealed that InsurTech is the most suitable tool for accomplishing the task while social media platforms such as Instagram and Facebook are helpful tools for customer engagement and experience and enhances operational efficiency, augments customer experiences, and ensures regulatory compliance, leading to increase in satisfaction and loyalty. This new development is expected to force conventional insurance providers to adopt Takaful approaches to remain competitive in the rapidly changing industry. Additionally, the research found that specific issues faced by Islamic finance, including Shariah compliance, cyber security and the digital divide will be appropriately resolved if Takaful industry is completely digitalized in Nigeria. The research calls for the need for a strategic plan that leverage on digital channels and ensure Shariah compliance to promote growth in the Islamic finance industry.