The aafaq Center for Research in Islamic Economy (ACRIE) and Hamdan Bin Mohammed Smart University's (HBMSU's)
Dubai Center for Islamic Banking and Finance (DCIBF) have released a report on takaful at the third Global Islamic Economic Summit (GIES) in Dubai, UAE.
Takaful: Global Challenges to Growth Performance and Governance was developed in collaboration with the Dubai Islamic Economy Development Centre (DIEDC), and ACRIE, a subsidiary of aafaq Islamic Finance.
Takaful: Global Challenges to Growth Performance and Governance was developed in collaboration with the Dubai Islamic Economy Development Centre (DIEDC), and ACRIE, a subsidiary of aafaq Islamic Finance.
The report reveals that the GCC region currently dominates the takaful business, with Southeast Asia and Africa as the next biggest markets. The report estimates that the global takaful market could be worth US$52.5 billion by 2020. Potential obstacles include the relative under-development of insurance distribution channels in several emerging markets, however.
HE Essa Kazim, Governor of the Dubai International Financial Centre (DIFC) and Secretary General of the DIEDC said: “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. We commend DCIBF for its thorough and precise study on prevailing trends, opportunities and threats in the takaful domain.”
Dr Mansoor Al Awar, Chancellor, HBMSU, said: “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. Despite its gains, though, the industry is still under-manned and faces several issues in vital areas such as innovation, distribution, and legal structures, among others. DCIBF’s report exhaustively investigates the key factors affecting the performance and governance of takaful and what actions government and industry need to take to ensure sustained and profitable growth.”
HE Dr Abduljaleel Alblouki, Deputy Chairman of aafaq Islamic Finance, added: “ACRIE and DCIBF and DIEDC have prepared an outstanding account of the current Takaful landscape and key areas for improvement that can further increase the sector’s impact on the global Islamic economy. It was a very enlightening experience for us to join the Center in exploring the takaful industry’s mechanisms, strengths, and gaps. Our report gives takaful players and stakeholders a clearer picture of what to expect, what to address and what to aim for as the sector gains a firmer foothold on the international markets.”
Recognizing takaful’s growing importance as an Islamic alternative to insurance, HBMSU and DCIBF tapped Dr Omar Fisher to prepare the report. Dr Fisher, who earned his PhD in takaful in 2005, has founded takaful companies in three countries. He said: “The Takaful Report, a groundbreaking effort by DCIBF, looks into the global trends and major challenges facing this risk management sector by covering 219 takaful operators across 39 countries. The publication of such comprehensive report further reinforces knowledge sharing in the industry and anchors Dubai as the Capital of Global Islamic Economy.”
Produced in Arabic and English to reach a broad international audience, the scientific report examines the efficiency and financial stability of the Takaful sector in countries with dual financial and economic systems. It identifies and discusses various Islamic insurance challenges and issues, quantifies investment trends, and analyses the impacts of demand and industry structure on market movements. It also explores the governance mechanisms of the takaful industry, delves into diverse takaful operational models, and provides key recommendations to policy makers and stakeholders.
The key insights provided by Takaful: Global Challenges to Growth Performance and Governance reflect the growing role DCIBF is playing in investigating and studying major technical and socioeconomic issues affecting Islamic banking and finance. The Center is the result of HBMSU’s efforts to become the first learning institute to launch a dedicated platform for enhancing both academic knowledge and human capital development in Islamic banking and finance at the regional and international levels. DCIBF embodies HBMSU’s commitment to the provision of quality education, training, research and community service and the promotion of best practices in the field of Islamic banking and finance.