In Somalia, all insurance must now be Islamic. The takaful law passed in May 2025 bans conventional insurance, and in January 2026 the Central Bank granted the first licences to four operators, including First Somali Takaful and Amanah Insurance.
A first insurance law, entirely sharia-based
The Islamic Insurance (Takaful) Law, known as the National Takaful Law, was passed in May 2025. It is the very first Somali law on insurance, imposing a sharia-compliant framework on the whole sector while prohibiting conventional insurance altogether.
The Central Bank as sole sector authority
The Central Bank of Somalia regulates and supervises all takaful activity. Unlike many countries with a separate insurance regulator, here the central bank itself issues licences, monitors solvency and receives the financial reports that operators are required to submit.
Three regulations governing operators
The CBS adopted the Takaful Licensing Regulations 2025, which apply to local and foreign operators alike. Two further texts were approved: one covers financial reporting, and the other sets capital adequacy and solvency requirements for takaful companies.
July 2025: licence applications open
The takaful licensing process was launched on 13 July 2025. By January 2026, seven operators and one broker had filed applications, a sign of genuine interest in a market that was starting from scratch in regulatory terms.
The first four licensed insurers
The CBS board approved the country's first licences on 24 January 2026, announced on 27 January: First Somali Takaful Insurance LTD, Amanah Insurance LTD, Baraka Takaful Insurance LTD and Salmaster Insurance. Always check the exact name against the official press release.
An association to engage with the regulator
A takaful association has been set up to ease dialogue between the market and the Central Bank. Its role is to help operators apply the new regulations and align their practices, particularly in how they manage the participants' fund.
Malaysian inspiration and regional cooperation
Somali and Djiboutian representatives joined a study visit to Kuala Lumpur from 23 to 28 February 2025. This link with Malaysia sheds light on Somalia's choices, which are worth comparing with the takaful framework in Djibouti, its direct neighbour.
Which operating model should you expect?
Public sources do not yet state the model chosen by each Somali company. Ask whether the operator uses a wakala fee arrangement, mudaraba on investments or a hybrid model, and who sits on its sharia committee.
Surplus sharing, a point to clarify
In a takaful fund, the underwriting surplus belongs in principle to participants. Before signing, insist that the rules for surplus distribution are set out in writing in the policy, since no Somali market practice has been documented yet.
A market without published statistics
No premium figures or market size data appear in the available sources. For policyholders, this means little track record on the strength of the newly licensed firms, so compliance with the capital rules set by the CBS becomes the main benchmark.
Diaspora: covering a relative back home
Somalis living abroad often pay for their family's healthcare, trade or housing. Any policy taken out locally must now be takaful; compare it with offers on the Kenyan takaful market, which is older and shares a border.
Hajj and repatriation from Mogadishu
Cover for pilgrimage or for repatriating the body of a deceased relative remains a common need in Somali families. Before travelling, check whether a licensed operator offers travel or death cover, or whether a foreign insurer holds a CBS licence.
Taking out a takaful policy in Somalia, step by step
- Read the Central Bank of Somalia press release of 27 January 2026 to confirm the insurer is among the licensed companies.
- Ask which operating model applies, wakala, mudaraba or hybrid, along with the membership and fatwa of the operator's sharia committee.
- Compare the contribution, the operator's fee and the surplus-sharing rule across several licensed offers.
- Read the list of exclusions and the claim limits, especially for health, goods and commercial property.
- Keep a signed copy of the policy and the contribution receipts, both on paper and in digital form.
- If a loss occurs, report it promptly in writing to the operator and gather relevant photos, invoices and reports.
What makes up the price of Somali takaful cover
| Component | Purpose | What makes it vary |
|---|---|---|
| Contribution (tabarru) | Funds the participants' common pool | Type of risk, insured value, claims history |
| Wakala fee | Pays the operator for management | Percentage set in the contract, not published for the Somali market |
| Mudaraba share | Pays the operator on investments | Return on sharia-compliant investments |
| Distributable surplus | Any excess returned to participants | Fund claims experience, reserves required by the CBS |
| Deductible | Share of the loss borne by the policyholder | Level chosen at inception |
Documents to gather for an application in Somalia
- Valid identity card or passport
- Proof of address or residence certificate
- Company registration certificate for business cover
- Vehicle documents for motor cover
- Inventory and invoices for the goods or equipment to be insured
- Medical questionnaire for health or death cover
Pitfalls to avoid in the new Somali market
- Buying from a company that is not among the operators licensed by the Central Bank, now that the 2025 law strictly regulates the activity.
- Assuming that a policy sold before the January 2026 licences automatically benefits from the protections in the new solvency regulations.
- Relying on the takaful label alone without asking about the operating model, the fee level and the names of the sharia committee members.
- Accepting a verbal promise of surplus refunds that is not written into the general terms and conditions of the contract.
- Mistaking an informal mutual aid fund for a supervised takaful operator whose capital is monitored by the CBS.
Your questions about takaful in Somalia
Is conventional insurance still allowed in Somalia?
No. The National Takaful Law passed in May 2025 imposes a sharia-compliant framework on all insurance and bans conventional insurance. Companies must obtain a takaful licence from the Central Bank under the licensing regulations adopted that same year.
Which takaful insurers are licensed in Somalia?
The first licences, approved on 24 January 2026, went to First Somali Takaful Insurance, Amanah Insurance, Baraka Takaful Insurance and Salmaster Insurance. Other applications were pending, as seven operators and one broker had applied, so check Central Bank announcements for the current list.
Can a foreign insurer operate in Somalia?
The Takaful Licensing Regulations 2025 apply to both local and foreign operators. A foreign company must therefore also obtain a Central Bank licence and comply with the financial reporting and solvency rules before offering cover in the country.
Are there any figures on the Somali takaful market?
Not yet. No premium or market size data has been published in the sources reviewed. The sector is only just emerging from its regulatory build-up phase, between the May 2025 law and the first licences of January 2026.