Islamic insurance to sustain rapid growth in Gulf region

  • Share via facebook
  • Tweet this
  • Bookmark and Share
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.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

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.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Funding the micro-entrepreneurs

Funding the micro-entrepreneurs

Sourcing Financing is often one of the biggest concerns for start...

Making over the multi-billion microfinance industry

Making over the multi-billion microfinance industry

A number of microfinance institutions lend as much as $70bn annually...

Most UAE residents in debt face 'threatening' calls from police

Most UAE residents in debt face 'threatening' calls from police

First Arabian Business debt survey reveals only 9% believe banks...

9
Most Discussed
  • 6
    UK politician sacked over burka binbag jibe

    The whole point is that women should dictate what they want to wear and not men. That should be the underlying motive. If a woman WANTS to wear a burqa... more

    Wednesday, 27 August 2014 1:16 PM - mick
  • 5
    UAE teens among the highest for obesity rates

    There are loads of fatties in Dubai. They don't offend me personally. Unlike other countries where taxes support the health system, here, each person has... more

    Wednesday, 27 August 2014 4:04 PM - nice
  • 5
    Smoke-free Dubai - the big debate

    Surprisingly the only studies that show a negative financial impact of the smoking ban on the hospitality industry are sponsored by tobacco companies ... more

    Wednesday, 27 August 2014 4:19 PM - Telcoguy