Islamic insurance industry is expected to grow upto 40% as more and more people are shifting from conventional products to Islamic insurance products.
Recession might have slowed the growth pace of worldwide Islamic insurance sector (Takaful), but the sector still maintains its strength with higher number of people switching to Islamic insurance products from traditional insurance products, as reported by ARABTIMES.
Ahmed al-Janahi, Managing Director of Noor Takaful, said at the Reuters Islamic Banking and Finance Summit that the Takaful market is anticipated to grow almost 30-40% per annum in the coming 3-5 years, and could reach up to $11 Billion by 2015, as reported by REUTERS on April 18, 2009. Moreover, at present, the global Takaful market is estimated around $2.5 Billion.
Meanwhile, industry players also believe that the Takaful market is certainly well-poised to bear the impacts of recession in comparison to the conventional insurance market owing to asset-based investment strategies. World has witnessed the collapse of AIG and several others, so even people in the western countries are looking at Takaful market on ethical grounds.
Under Takaful insurance, all the members collect funds that are used to help members who undergo a loss. Profits earned from the funds invested are shared among the participants.
Islamic insurance market apparently does not exist in Europe, while it is growing at a rapid pace in the Gulf Arab region, Malaysia and Indonesia. So, Europe could be a highly potential region for the expansion of the market. Takaful has emerged strongly as a good alternative to traditional insurance over the recent years. Moreover, it has made a major shift from being a regional industry to become a global industry.
Salaam Halaal is the only pure Sharia insurer in the UK that sells its products to the Muslim community in the country. Also, HSBC Amanah provides home insurance products in the country. France, where nearly 5 Million Muslims dwell, is also making changes in its law, permitting Islamic financial institutes into the country, which might include Takaful companies.
According to a Research Analyst at RNCOS, “The industry fundamentals like changing demographics, growing incomes, shift in social attitude towards the insurance products and rising consumption levels will continue to drive the Islamic insurance industry.”
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