Islamic insurance growth in GCC outpaces global average – S&P


If the region can match global averages for insurance spending, its Takaful market will be worth $4bn and its conventional insurance market another $16bn, S&P said.
“A sizeable, underinsured population means that there are substantial prospects for further development of personal lines cover,” S&P analyst Jelena Bjelanovic said in the report.

Takaful, based on the Islamic principle of mutual assistance in which members are insurers as well as the insured, is surging in popularity as record oil earnings fuel economic growth in the Gulf. The global market for Takaful may expand fivefold to $14bn by 2015, according to HSBC Holdings.

Allianz of Germany, Europe’s biggest insurer, last month said it plans to set up a Takaful company in Bahrain.


American International Group, the world’s largest insurer, in October started a Bahrain-based Takaful unit targeting what it estimates are 300mn potential buyers of Islamic insurance cover.


The global Takaful industry is growing 15% a year, Abdallah Kubursi, AIG’s regional vice president for the Middle East, today told an industry conference in Dubai. Takaful premiums written in the Arab world will rise almost 20-fold by 2015 to $4.2bn from $170mn now, he said.


The Gulf’s Takaful market is now worth $170mn, S&P said. The industry’s future success depends its ability to "demonstrate the need for and benefits of insurance".
Many of the world’s estimated 1.5bn Muslims reject conventional insurance because they say it breaks Islamic Shariah law’s proscriptions against betting on future events.


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