Dubai: Global takaful (Islamic insurance) contributions are expected to reach $12 billion (Dh44.04 billion) by the end of this year and reach $25 billion by 2015, according to Ernst & Young's World Takaful Report 2011 released yesterday.
Total takaful premiums amounted to $9.15 billion last year. "The takaful industry and its core markets have experienced another challenging year, where positive signs of economic recovery and improved business sentiment were shaken by the socio-political uncertainty witnessed across the Middle East and North Africa (Mena) region in the first quarter of 2011," said Ashar Nazim, Executive Director & Islamic Financial Services Leader, Ernst and Young. (source)
The original press brief from Ernst and Young can be accessed at their website : here
The 2011 World Takaful Report can be downloaded at the Ernst and Young Website : here
The original press brief from Ernst and Young can be accessed at their website : here
The 2011 World Takaful Report can be downloaded at the Ernst and Young Website : here
Islamic insurance will continue to be among the fastest growing sectors in the Gulf and Malaysia, with life insurance providing the greatest opportunity for profitability, according to a recent study by A.M. Best. Among the 131 takaful operators and conventional companies surveyed, life insurance, or family takaful, made up less than 25 per cent of the contributions received but offered higher margins and stability, said Vasilis Katsipis, an insurance industry analyst with AM Best.
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"In 2011, the financial performance of family takaful operators will be higher than that of the conventional life insurers," said Katsipis.
The takaful industry is concentrated mainly in the Middle East and North Africa (Mena) and South East Asia, with Saudi Arabia (contributions totalling $3.86 billion in 2009), Malaysia with $1.15 billion and the UAE ($640 million) being the top three takaful markets
Most GCC markets have witnessed a slowdown in takaful growth with only Saudi's takaful market remaining strong due to the continued rollout of compulsory medical insurance.
Sudan, with contributions of $340 million, is the most significant market outside these regions. In addition, Egypt, Bangladesh and Pakistan are growing at a rapid pace.
"The industry is not without risks, but its potential remains an important feature of Muslim emerging markets for many indigenous and global insurance players," said Nazim.
In terms of regions, takaful contributions in the Indian Subcontinent grew by 85 per cent, making it the world's fastest growing takaful market. It was followed by the growth in Levant (40 per cent), GCC (31 per cent), SE Asia (29 per cent) and Africa (26 per cent).
"The Mena takaful market is much younger than the Malaysian market and, therefore, has not yet achieved the same level of scale. This affects the operating performance of the takaful players. Within the Mena region, the GCC is a more competitive market with a larger number of players and will drive growth for the industry," said Nazim.
Key takaful markets are characterised by low insurance penetration rates and comparatively high rates of economic growth, leading to a positive outlook for the sector as a whole. In terms of individual countries, Indonesia topped the takaful market with a growth rate of 67 per cent, followed by Bangladesh (58 per cent) and Saudi Arabia (34 per cent).
Source : http://gulfnews.com/business/banking/global-takaful-premiums-to-touch-25b-by-2015-1.840824 - July 21, 2011
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