The Insurance Authority of UAE has drafted regulations to help regulate the market due to the strong growth in the takaful market and continued expectations of future growth. According to Moody's Investors' Service, which provides credit ratings and research covering debt instruments and securities, the growth has been driven by relatively low insurance penetration and density compared to more developed markets, and also the relatively recent growth in substantial insurable assets furthered by Dubai’s vision to become the capital of the global Islamic economy.
Moody's Mohammed Ali Riyazuddin Londe says the regulations, which were drafted in 2012, will improve the credit profile of the UAE takaful market and aid market stability and transparency when they are implemented, by strengthening aspects of the market such as capital requirements, asset quality and reserve adequacy.
"The regulations are evolutionary by way of market consultation, which should help in the market’s understanding and acceptance of these, albeit leading to a slightly slower implementation process," notes Londe in an October Sector Comment titled UAE Takaful Market to Benefit from Credit Positive Regulatory Changes, which also discusses the implications of the new solvency requirements and advanced asset liability changes in-depth.
Takaful players in the UAE include Abu Dhabi National Takaful Company, Dubai Islamic Insurance & Reinsurance Co (Aman), Methaq Takaful Insurance Company, Takaful Emarat Insurance and Dar Al Takaful.