WORKING HOURS

9:00am to 06:30pm

CALL US

+91 11 29945946

MAIL US

info@icif.in

Global Takaful industry poised to be at $25.5b by 2020

Dubai: The Takaful industry, which is also known as Islamic insurance, is poised to increase to $20 billion (Dh73.4 billion) by 2017 and $25.5 billion by 2020 from the current $12 billion, even though there are critical gaps that needs to be addressed, a study has revealed.

The report reveals that the GCC region currently dominates the Takaful business, with Southeast Asia and Africa as the next biggest markets.

There were a total of 224 global Takaful operators as of 2012, with 101 new companies formed between 2006 and 2012 alone. The total manpower supporting the Primary Takaful sector stood at 70,010 as of 2013.

“The Takaful sector is an important component of global Islamic finance that requires more attention and research in order to address major issues and achieve long-term growth,” said Eisa Kazim, Governor of the Dubai International Financial Centre (DIFC) and Secretary General of the Dubai Islamic Economy Development Centre .

Growth in Takaful, which is a mutual risk sharing under the principle of indemnification, has been eclipsed by the capitalist system drive for profit maximisation from the business, said Omar Fisher, managing director of Khidr Solutions Consultancy.

Over the last 10 years the number of Takaful companies has climbed nearly four-fold, reflecting the growing global popularity of the sector and its increasing importance to the development of Islamic finance, industry participants said.

Takaful has been witnessing a rapid growth in Africa. Between 2006-2012, 101 new Takaful companies were formed in that part of the world.

The global insurance premiums are more than $4 trillion and most of them is done by mutual companies, who dominate in the European and the US markets. In olden days, Takaful was the second important social institution after Zakat (charity) for the poor.

“We believe the potential of the Takfaful sector to drive growth is not limited to Islamic finance alone, but impacts the wider Islamic ecosystem as well,” said Abdulla Mohammad Al Awar, CEO of Dubai Islamic Economy Development Centre (DIEDC).

Challenges

Less than 239 active Takaful companies are less than 15 years old, and 47 per cent are less than 5 years old, so it’s an emerging segment, triggering a need to experiment with conventional insurance.

There is also a scarcity of pool of talent in this emerging industry, Fisher said.

“Despite its gains, though, the industry is still undermanned and faces several issues in vital areas such as innovation, distribution, and legal structures, among others,” said Mansoor Al Awar, Chancellor, Hamdan Bin Mohammed Smart University.

Meanwhile, the Dubai Centre for Islamic Banking and Finance (DCIBF), a joint initiative of Hamdan Bin Mohammad Smart University (HBMSU) and ‘Dubai the Capital of Islamic Economy’, and Aafaq Centre for Research in Islamic Economy (ACRIE), a subsidiary company of Aafaq Islamic Finance, released their extensive report entitled ‘Takaful: Global Challenges to Growth Performance and Governance’ during the 2015 Global Islamic Economic Summit in Dubai.

 

gulfnews.com/business/economy/global-takaful-industry-poised-to-be-at-25-5b-by-2020-1.1596226

Posted Date : 09 October 2015

News Updates

  • INT’L ZAKAT CONFERENCE KERALA CATERS HOPE FOR CREATIVE ZAKAT SYSTEM IN INDIA

    By HABEEB RAHMAN CP The International Zakat Conference, organised by Baithuzzakath Kerala, concludes in Cochin with the new hope for the effective zakat management in the country. More than 250 high-profile delegates from various parts of the country and other nations participated in the conference...

    Read More
  • ZAKAT THE SOURCE OF SOCIAL UPLIFTMENT AND ECONOMIC EMPOWERMENT

    Dr. Rahmatullah Abdul Ahad dwells upon how Zakat can be a source of social upliftment and economic empowerment. Poverty, which indicates the absence of material means, is rampant in all the states of India irrespective of caste and clan wise composition of the society. The consequence is sufferings...

    Read More
  • ISLAMIC BANKING IN J&K: HC GIVES FINANCE MINISTRY, RBI TWO MORE WEEKS TO RESPOND

    The Forum also seeks direction to the J&K Bank to take immediate steps for opening of Shariah-compliant windows to accomplish the objective of mass level participation in Shariah Banking. The High Court on Tuesday granted two more weeks to the Union Finance Ministry, Reserve Bank of Ind...

    Read More
  • Online admission for second batch of MBA Insurance 2018 - 2020 at Jamia Hamdard

    Online admission for second batch of MBA Insurance 2018 - 2020 at Jamia Hamdard, Deemed University, New Delhi has started. The link is https://admissions. jamiahamdard.edu This insurance course is being run by Jamia Hamdard in collaboration with Asean Institute of Insurance & Risk M...

    Read More
  • ISLAMIC FINANCE EMBRACING SMALL, MEDIUM ENTERPRISES

    There is an ongoing trend in countries with Islamic finance ecosystems of discovering the importance of small and medium enterprises (SMEs) for economic well-being and growth.  Traditionally, SMEs have not played a substantial role in oil-rich Middle Eastern countries where the economy used ...

    Read More
  • INDONESIA PRESIDENT OPTIMISTIC ON GROWTH OF FUNDS FOR MICRO WAKAF BANKS

    Banten, March 14 -- President Joko Widodo (Jokowi) is optimistic that several people would come forward to donate funds to micro 'wakaf' banks in Indonesia, thereby encouraging the development of the micro business sector. "We will push donors as much as possible. I am certain many people want...

    Read More
  • PIL PRAYS FOR ISLAMIC BANKING IN J&K

    High Court Issues Notices; Asks Union Finance Ministry, RBI, J&K Bank, J&K Government To Respond D A RASHID Srinagar, Publish Date: Mar 20 2018 The High Court on Monday asked Union Finance Ministry, Reserve Bank of India, Jammu and Kashmir Government and Jammu and Kashmir Bank to respond t...

    Read More