Global Takaful insurance target $44bn by 2024

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With the growing number of companies entering the takaful market, the Islamic insurance sector is expected to expand to $44bn in the next three years, expanding at a CAGR of 12.8 percent during 2019-2024, accoring to an industry expert.

Takaful insurance companies serve as an alternative to commercial insurance companies as the latter violate the restrictions on interest, uncertainty and gambling principles which are outlawed in sharia. Recently, there has been a rise in the number of institutions that offer Islamic financial services which have aided in the expansion of takaful across the globe.

Countries in South East Asia have implemented the Life Insurance and Family Takaful (LIFE) Framework which is expected to spur various market activities and enhance the sustainability of the takaful industry in the longer run. Apart from this, there has been a rise in the awareness among Muslims regarding the monetary benefits offered by takaful insurance.

This has encouraged foreign insurance companies to collaborate with takaful insurance companies, in turn, expanding their worldwide market reach. Moreover, the demand for takaful insurance products is also rising amongst the non-Muslim consumers as it is an ethical investment policy, with strong growth prospects and price competitiveness.

Despite these growth-inducing factors, the global takaful market is being impeded by the current inability of insurers to retain consumers

Speaking during a webinar hosted by Doha-based SEIB Insurance and Reinsurance on the Islamic insurance sector, Dr Mazen Abou Chakra, managing director of Gen Re Life and Health in MENA and the East Mediterranean region, said that the annual gross written contribution in 2020 was around $21bn worldwide. He added that the industry is projected to grow to $44bn by 2024, reported the newspaper The Peninsula.

Dr Mazen said takaful markets are mainly in Malaysia, Saudi Arabia and Iran, which together command around 80% of global takaful assets.

Another industry expert, Nohra Chaghouri, said, “In the mid-1990’s, there were only seven takaful companies in Sudan, Dubai, Saudi Arabia, Bahrain and Jordan, and in 2016, this number increased to around 300 takaful companies.”

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