"Equally, industry executives recognise the importance of implementing good governance practices to facilitate compliance and devise well-balanced investment strategies to realise growth and sustainability," says Dr Hatim El-Tahir, Leader, Deloitte ME Islamic Finance Knowledge Center in his foreword for Deloitte’s 2014 Takaful Insurance Report for Asia, Middle East and Africa.
Deloitte's report, The way forward for Takaful, builds on Deloitte's last study on the global Takaful insurance market, and looks more deeply into the core Takaful markets in the Middle East and South Asia. Its research examines the economic and regulatory environment in six selected countries: KSA, UAE and Bahrain from the Middle East, and Pakistan, Malaysia and Indonesia representing South Asia. An additional analysis of the insurance sector and takaful is based on the financial performance and investment strategies of a selected group of prominent takaful firms.
Deloitte says this study marks the beginning of a new approach in the field of Islamic finance, that is, industry-driven research. This aspiration is shared by Deloitte Middle East and two prominent research institutions – the International Centre for Education in Islamic Finance (INCEIF) and Henley Business School, University of Reading.
Some findings of the report:
Insurance penetration rates in the markets examined in this study are invariably under 5% with the exception of Malaysia, Singapore, Japan and Hong Kong, where penetration rates amounted to 5.1%, 6.2%, 10.1% and 11.5% respectively.
Deloitte's report, The way forward for Takaful, builds on Deloitte's last study on the global Takaful insurance market, and looks more deeply into the core Takaful markets in the Middle East and South Asia. Its research examines the economic and regulatory environment in six selected countries: KSA, UAE and Bahrain from the Middle East, and Pakistan, Malaysia and Indonesia representing South Asia. An additional analysis of the insurance sector and takaful is based on the financial performance and investment strategies of a selected group of prominent takaful firms.
Deloitte says this study marks the beginning of a new approach in the field of Islamic finance, that is, industry-driven research. This aspiration is shared by Deloitte Middle East and two prominent research institutions – the International Centre for Education in Islamic Finance (INCEIF) and Henley Business School, University of Reading.
Some findings of the report:
Insurance penetration rates in the markets examined in this study are invariably under 5% with the exception of Malaysia, Singapore, Japan and Hong Kong, where penetration rates amounted to 5.1%, 6.2%, 10.1% and 11.5% respectively.
Conversely, the global takaful insurance market exhibited double digit growth, representing 18% CAGR from 2007 to 2012 with worldwide gross takaful contributions reaching US$18.3 billion in the first half of 2013.
There is a clear gap in the level of regulation and government support provided to takaful compared to insurance firms. Malaysia is by far leading the wave of best practices legislation in the sector, and the Gulf Cooperation Council (GCC) is striving to improve playing field levels for both takaful and insurance firms.
In the GCC, the UAE has the best depth and breadth of products, and offers the most diversified suite of family and general takaful products.
There is a clear gap in the level of regulation and government support provided to takaful compared to insurance firms. Malaysia is by far leading the wave of best practices legislation in the sector, and the Gulf Cooperation Council (GCC) is striving to improve playing field levels for both takaful and insurance firms.
In the GCC, the UAE has the best depth and breadth of products, and offers the most diversified suite of family and general takaful products.
The Malaysian takaful industry is expected to grow by 20% per annum for the next two years based on the growing trend of consumer acceptance and strengthened regulatory infrastructure
There is particular potential in Indonesia, KSA and Pakistan.
Download the report here.
2015 will see more than US$17 billion in annual gross contributions by 2015, with KSA making up close to half that figure.
Download the report here.