Kenya Re is pushing for wider use of Takaful and Retakaful insurance, saying the Sharia-compliant system could help extend financial protection to communities that have remained outside the reach of conventional insurance.
Kenya Re Head of Marketing Sally Waigumo said the model's focus on collective responsibility and shared risk could give vulnerable households a different way of dealing with financial losses, particularly those linked to climate-related shocks.
Speaking at the Islamic Finance Forum and Dialogue Conference 2026 at the Radisson Blu Arboretum in Nairobi on Thursday, Waigumo said Takaful is built on the idea of people joining forces to protect each other when losses occur.
“People come together to mutually protect one another, and that is the principle of community risk sharing. We will look at how Takaful compares with conventional insurance, the growth trajectory of the Kenyan market, the role of Takaful insurance in Africa, and the work of Kenya Re’s Retakaful window,” she said.
In the Takaful system, participants contribute to a common pool that is used to support members who suffer qualifying losses. Retakaful extends the same Sharia-compliant concept to the reinsurance market, allowing Takaful operators to share part of their risks without moving away from Islamic financial principles.
Kenya Re established its Retakaful window in 2012 before beginning operations the following year. The reinsurer says it was the first local company to establish such a facility, offering proportional and non-proportional support for treaty and facultative business in Africa, the Middle East and Asia.
Waigumo said the Retakaful operation has become an important part of Kenya Re's strategy as it seeks to provide reinsurance capacity that meets Sharia requirements.
“Our mission is to provide world-class Sharia-compliant Retakaful solutions and capacity to our clients,” she stated.
The renewed focus on Takaful comes as Kenya's insurance industry records growth but continues to have a large section of the population without adequate cover.
Insurance Regulatory Authority data shows that gross written premiums reached Sh352.29 billion by September 2025, rising by 11.2% compared with the same period in 2024. Microinsurance, which focuses on low-income and underserved groups, accounted for Sh1.53 billion in gross premiums during the period.
The IRA's 2023 annual report placed insurance penetration at 2.39% of gross domestic product, up from 2.29% in 2022. It further showed that about 22 million lives were insured in 2023, representing 42.7% of the population.
Waigumo said the figures point to an opportunity for Takaful to reach groups that have not benefited fully from existing financial products.
She identified smallholder farmers and other communities facing economic hardship as potential beneficiaries, especially as droughts, floods and other climate-related events continue to expose households to losses.
“Smallholder farmers and communities are increasingly exposed to risks such as drought and floods. Cooperative safety nets can help communities respond to these shocks,” she said.
Waigumo also stressed the need for strong Sharia oversight to maintain confidence in Islamic insurance products. She said supervisory boards play a key role in checking that the products and investments meet the required standards.
“The Sharia supervisory body is an independent council of qualified Islamic experts in jurisprudence and commerce. It acts as an ongoing ethical core auditor of the system, and it verifies the premium contributions that are structurally separated from management cash reserves and certifies insurance policy contracts for consumer fairness,” Waigumo said.
According to Waigumo, the oversight also helps ensure investments follow ethical requirements while keeping the system free from prohibited interest, known as riba, and excessive uncertainty, or gharar.
Kenya Re operates its Retakaful business under a Wakalah-Mudarabah structure. The arrangement combines an agency model for managing participants' funds with profit-sharing from investments.
The Takaful market is also projected to maintain strong growth globally. A 2026 market assessment estimates that the sector was worth $36.5 billion in 2025 and could grow to $63.62 billion by 2030, with annual growth of about 11.7%.
Waigumo said the expected expansion should encourage stakeholders to see Takaful and Retakaful as part of the changing financial services landscape rather than products meant for a limited market.
“Takaful and Retakaful should not be viewed simply as niche financial products. They are part of a wider evolution in how communities can share risk, mobilise capital and participate in ethical financial systems,” she said.
She called on stakeholders to promote cooperation, shared responsibility, ethical investment and trust as part of efforts to increase insurance coverage and strengthen Kenya's financial sector.