Islamic insurance to sustain rapid growth in Gulf region

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Islamic insurance, or takaful, will continue to be among the fastest growing sectors in the Gulf and Malaysia

Islamic insurance, or takaful, will continue to be among the fastest growing sectors in the Gulf and Malaysia

Islamic insurance, or takaful, will continue to be among the fastest growing sectors in the Gulf and Malaysia, with life insurance providing the greatest opportunity for profitability, a study by AM Best said.

Among the 131 takaful operators and conventional companies surveyed, life insurance, or family takaful, made up less than 25 percent of the contributions received but offered higher margins and stability, said analyst Vasilis Katsipis.

"In 2011, the financial performance of family takaful operators will be higher than that of the conventional life insurers," Katsipis wrote in the study.

Family takaful, with a compounded annual growth rate of 22 percent between 2004 and 2009, also outpaced growth in the conventional life insurance market which grew by 5 percent over the same time period.

During the same period, the sector also delivered a higher return on life premiums of close to 15 percent as compared to growth of 7.3 percent to 9.4 percent for its conventional counterpart, the survey by the insurance ratings agency said.

General takaful, however, has seen varied profitability in the Gulf, although Malaysia has seen more stable growth and combined ratios ranging from 93 percent to 74 percent between 2004 and 2009.

Gulf Islamic insurers, which have only recently emerged on the scene, have suffered from a dip in the economy and intense competition with conventional insurance companies.

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Posted by: Ihsan Khan

The recession took all of us by surprise when most of us realized we are without any financial protection. Hope UAE citizens (specially expats) now know the importance of financial planning for the future - The real reason we expats are working here for & this is the basic reason Insurance (especially Islamic Insurance) in this country will grow.

Posted by: irfan khaki

Perfectly correct - In fact the Govt. needs to start a compulsory saving scheme to avoid people running away from debts & for the overall mental well being.

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