IFN RSS feeds twitter
 
Subscriber Login
User ID:
Password:
Not a subscriber? Request for free trial
 
IFN Search

 
IFN Company Directory

 
Build your own
IFN Research Report
 
 
Latest Supplement
Supplements
 
 
Currency Converter
 
Books
 
Upcoming Training
 
Upcoming Conferences
 
Partners
 
Supplements  

THE TAKAFUL AND RE-TAKAFUL INDUSTRY

Although the Takaful industry has seen double digit growth since 2010 according to reports, it still suffers from a lack of penetration in supposedly vibrant markets, and is still performing at what is considered to be lackluster levels. Saudi Arabia remains by far the largest Takaful market, contributing US$4.3 billion or 51.8% of the industry at an average contribution per operator of US$141 million. Malaysia, considered one of the largest markets in the Islamic capital market space, grew 24% to reach contributions of US$1.4 billion at an average contribution per operator of US$141 million. The UAE, with contributions of US$818 million, has charted a growth rate of 28%; whilst Sudan, which is considered to be the most significant market outside of the GCC and Southeast Asia, has seen more than 7% growth since 2010, with contributions totalling US$363 million.

Many within the industry have admitted to a gamut of issues which need to be addressed urgently and effectively in order to allow the industry to perform at its best; particularly in the investment space, where Takaful companies are suffering from a dearth of long-term investment opportunities to suit their risk and investment profiles. Another issue stems from the lack of risk-based capital, where there is a mismatch between the companies’ assets and liabilities, and the universal issue of lack of talent and understanding of Shariah based insurance products.

And although the global credit crisis has contributed to the slow-down in the growth of the Takaful industry, with lower returns all round for shareholders and Takaful policyholders and slower business growth on the back of a contracting economy, there is still much untapped potential in the re-Takaful sector, which has on the contrary seen new players entering the market due to the lower entry cost for re-Takaful operators, and the ability to write business on a global scale.

In this issue of Islamic Finance news Supplements, we take a closer look at the fundamentals of the Takaful industry, its issues from a macro and micro perspective, and what needs to be done to mitigate these problems in order to prevent a stagnation of growth within a sector which is ultimately brimming with potential.

 

View interactive book

View PDF Edition

 
CONTENTS
 
 
Latest Issue
Wednesday 25th February 2015
Volume 12 Issue 08
   
Cover Story
IFN Rapid
News Briefs
Asset Management
Takaful
Ratings
Moves
IFN Reports
  PIDM — shifting gears to propel the Islamic finance industry forward
  IFN Global Trendswatch
  New European Islamic finance player?
  Sovereign Sukuk: Indonesia making strides
  90 North acquires US$127 million US trophy property
  Islamic banking business boosts NBK’s position as strongest franchise in Kuwait
  IILM expands short-term Sukuk program
  IFN Weekly Poll: Would the upcoming Sukuk offering in Labuan by Australian joint venture company, SGI-Mitabu spur more Islamic finance activities back home in Australia?
IFN Country Correspondent
  Law reforms on the horizon
IFN Sector Correspondent
  Solid start to 2015 for Islamic syndicated finance
IFN Country Analysis
  France — a stronger Islamic finance presence in 2015?
IFN Sector Analysis
  Risk management: A continuous endeavour
Features
The search for an Islamic risk-free rate
Case Study
An exchangeable Sukuk with a hybrid structure: Cahaya Capital

Go top