Technavio market research analysts estimate the global takaful market will grow at a CAGR of around 19% between 2015 and 2019. The GCC is the largest contributor of the takaful market occupying around 69% share, the company said, while Saudi Arabia, UAE and Malaysia are predicted to be the high growth markets. Changing regulation, growing affluence, and growth in organised savings are some key market drivers in the GCC. Specifically, increasing awareness among Muslims about the benefits of life insurance is encouraging the use of financial products that follow shari'ah principles. This in turn is providing opportunities for foreign vendors to collaborate with insurance companies providing takaful products and increase their market reach.
The life/family takaful segment accounted for nearly 60% of the market share during 2014 and is expected to be worth US$20 billion by 2019. Life, medical and health, accident, and education plans comprise a significant portion of life/family takaful product segment.
“The market has ample opportunities in most of the Muslim countries as they have Islamic banks that provide a financially viable and competitive alternative insurance to its policyholders. Islamic banking cannot be fully sharia'h-based unless there is takaful to take their insurance business. Consequently, these products are gaining acceptance in emerging markets such as Indonesia and Malaysia as the majority of their population are Muslims, who are more inclined to purchase shari'ah-compliant products,” says Navin Rajendra, IT Hardware and Services, Technavio Research.
According to the research firm, the major vendors in the market are Kuwait Finance House, Dubai Islamic Bank, and Malayan Banking. Most of the takaful operators are concentrated in the Gulf region, however.
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