Dubai: The Islamic insurance industry in the region is projected to grow at 15 per cent per annum during the next eight years, a senior industry executive said at the World Takaful Conference (WTC), which opened in Dubai yesterday.
"Insurance penetration in the Muslim world is estimated to be less than five per cent while Muslims account for more than 25 per cent of the total world population.
"Considering the huge demand from the region, Takaful premiums should grow at more than 15 per cent annually," said Abdullah Kubursi, regional vice-president, AIG addressing a session on "Seizing the Growth Imperative: How can Takaful Operators Capture Growth Potential?" at WTC.
"There is clear evidence of growing demand for insurance from the GCC region as the regional economies are booming and the regulatory frameworks are becoming global in nature. There is a huge potential for growth for Islamic products in this part of the world as Muslims are becoming more affluent and aware of the advantages of takaful," said Kubursi.
Currently the total global conventional insurance premium is worth $1.6 trillion accounting for 99.3 per cent of the total global insurance premium while takaful represents just 0.7 per cent ($11 billion).
The Middle East accounts for 38 per cent ($4.2 billion) of the total takaful premium, about 33.6 per cent ($3.7 billion) is generated from South East Asia.
Risk-based
The regulators and industry participants at the WTC said the fast-growing Islamic insurance market in the UAE and the region should come under risk- based regulation while the shariah based compliance issues should be left to Islamic scholars or the respective shariah boards of companies.
Commenting on Dubai International Financial Centre's efforts to promote takaful and Islamic banking Nasser Al Shaali, Chief Executive Officer of DIFC Authority said: "The DIFC is committed to promoting the growth and development of Islamic Insurance industry in accordance with Sharia principles. The takaful market is one of the fastest growing in the world and firms domiciled in the DIFC will complement the regional market."
DIFC's regulatory regime is flexible to accept various interpretations of takaful while its regulations are based on the risk perspective.
"Our approach to takaful as a regulator is to implement a risk-based regulatory and supervisory regime.
As market regulators, we are focused on providing stable, efficient, transparent flexible business environment while prescriptive rules or underlying principles or interpretations of Sharia are left to Sharia boards," said Lisa Kelaart-Courtney, Associate Director - Supervision, Dubai Financial Services Authority.
While projecting takaful as a highly competitive alternative to conventional insurance, leading industry players emphasised the role of innovation in offering products that meet the markets' requirements.
Below average
Global insurance statistics indicate that the insurance penetration and per capita premium density in the Muslim world is comparatively low while the share of GCC countries is below the global average.
According to AIG's estimates the GCC region has a potential for a gross premium of more than $20 billion, but currently it is below $4.5 billion.
Source : http://www.gulfnews.com/business/Insurance/10117167.html
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