Djibouti has a genuine takaful framework: Title 7 of law No. 161/AN/12/6ème L of 9 June 2012 imposes sharia, a committee of at least three experts and compliant reinsurance, yet no dedicated takaful operator has been identified.
The law of 9 June 2012 and its Title 7
Law No. 161/AN/12/6ème L, which regulates insurance companies, devotes its Title 7, articles 71 to 91, to takaful insurance. According to Oxford Business Group, this framework was strengthened in 2014 by implementing directives issued by the authorities.
Sharia across all operations
Article 73 requires all takaful activities, including investments, to comply with sharia. Article 79 specifies that funds must be invested in compatible forms, which rules out interest-bearing deposits and conventional bonds for any takaful operator in the country.
A sharia committee with binding decisions
Article 82 makes a committee of at least three experts mandatory, and its decisions bind the company. To understand its role and limits, read our analysis of the insurer's sharia supervisory committee and how it works in practice.
An advisory committee at the ministry
Article 83 allows the ministry to consult a sharia advisory committee, separate from those of the companies. This two-tier set-up, internal and administrative, mirrors countries where a central body harmonises the positions of scholars across the market.
Reinsurance must comply as well
Article 86 requires operators' reinsurance to respect takaful principles. A Djiboutian insurer must therefore cede its risks to Islamic reinsurers, a mechanism explained on our page about retakaful and its main players.
Oversight by the Ministry of Economy and Finance
Under article 74, oversight of takaful lies with the Ministry of Economy and Finance. The 1999 law had already created an Insurance Control Service under the minister's authority, and the Council of Ministers grants licences to insurance companies.
The limited role of the central bank
The Banque Centrale de Djibouti publishes the 2012 text, but it is not the insurance regulator. It plays only a marginal part, for instance by appointing a representative to the supervisory board when a company is placed under provisional administration.
A market long shared by two insurers
Oxford Business Group describes a market long limited to GXA Assurances and Assurance AMERGA, both founded in 2001. No verified source credits either with a takaful window, so ask them directly whether a compliant product exists.
The 2016 figures
In 2016, premiums reached about 3.3 billion Djibouti francs, or 18.6 million dollars and nearly 1% of GDP. GXA held 55.4% of the market and AMERGA 44.6%, while motor insurance accounted for 62.6% of premiums.
Islamic banks and cover for financing
Saba Islamic Bank, Salaam African Bank, Dahabshil Bank International and Shoura Bank are licensed under law No. 116/AN/11. Their takaful offering is not verified, so ask how they insure an asset financed through murabaha or ijara.
ICIEC for investors and exporters
Law No. 71/AN/04/5ème L ratifies the agreement on the Islamic Corporation for the Insurance of Investment and Export Credit, the ICIEC of the Islamic Development Bank group, which is useful for businesses trading through the port of Djibouti.
Motor cover and the regional neighbourhood
Motor insurance dominates the market, so compare guarantees with the criteria for sharia-compliant car insurance. Families living on both sides of the border can also review the situation of Islamic insurance in Somalia.
Getting takaful cover in Djibouti
- Ask GXA Assurances, AMERGA or any newly licensed company whether it offers a takaful product under Title 7 of the 2012 law.
- Check with the insurance department of the Ministry of Economy and Finance that the company is licensed for takaful.
- Request the membership of the sharia committee of at least three experts required by article 82 and its ruling on the contract.
- Compare contribution, management fees and surplus-sharing rules, then identify the retakaful reinsurer being used.
- Read the exclusions and report any claim in writing, with an accident report, photos and invoices, within the set deadline.
Price structure of a Djiboutian takaful policy
| Component | What it is for | What changes it |
|---|---|---|
| Tabarru contribution | Feeds the participants' common fund | Risk covered, insured value, claims record |
| Wakala fees | Pay the managing company | Rate set in the contract |
| Mudaraba share | Split of income from compliant investments | Return on investments allowed by article 79 |
| Retakaful cost | Compliant reinsurance required by article 86 | Capacity of Islamic reinsurers |
| Underwriting surplus | Possible redistribution to participants | Annual result and written clauses |
| Deductible | Amount left to the policyholder | Cover option chosen |
Documents for a Djiboutian policy
- National identity card or passport
- Proof of address in Djibouti
- Vehicle registration document for motor insurance
- Land title or lease for a home or commercial premises
- Medical questionnaire for life or health cover
- Murabaha or ijara contract if the asset is financed by an Islamic bank
Mistakes to avoid in Djibouti
- Believing that the Banque Centrale de Djibouti grants insurance licences, when oversight lies with the Ministry of Economy and Finance.
- Assuming an insurer offers takaful because the law provides for it, without obtaining a document describing the product and its sharia committee.
- Confusing cover arranged by an Islamic bank for its financing with takaful insurance that protects the borrower.
- Neglecting compulsory motor insurance, a line that represented more than 62% of market premiums in 2016.
- Accepting a promise of surplus redistribution that is not written into the terms of the signed contract.
Frequent questions on takaful in Djibouti
Does Djibouti have a takaful insurance law?
Yes. Law No. 161/AN/12/6ème L of 9 June 2012 devotes its Title 7, articles 71 to 91, to takaful. It imposes sharia on all operations, a sharia committee and compliant reinsurance for every operator.
Who supervises Djiboutian insurers?
The Ministry of Economy and Finance, through its insurance department. The Council of Ministers grants or withdraws licences on the department's advice, while the central bank plays only a marginal role in the sector.
Is there an active takaful operator?
No dedicated takaful operator has been identified with certainty. The market historically relied on GXA Assurances and Assurance AMERGA, with no verified Islamic window. Ask the companies and the ministry directly before buying cover.
What role does the legally required sharia committee play?
Article 82 requires at least three experts whose decisions bind the company. They approve products and investments. In addition, article 83 allows the ministry to consult a sharia advisory committee of its own.