The growth of Bahrain's takaful (Islamic insurance) sector dipped to single digits in 2011 for the first time in a decade, while still outpacing growth in conventional insurance, according to data released on Sunday by the country's central bank.
Takaful gross contributions grew by 4.25 percent to 40.2 million dinars ($107 million) in 2011, the central bank said in a statement. This compares to 18 percent growth in 2010, with double-digit growth registered in all of the previous 10 years, central bank data shows.
Zurich Insurance Group Ltd, a composite insurer, is considering a foray in the Islamic insurance market in Malaysia.
Chief executive officer Martin Senn said an exposure in Islamic insurance will make Zurich strategically stronger in the domestic market.
"We will consider Islamic insurance," Senn told reporters here on Thursday.
A combination of developments in the world of Islamic finance and banking suggest that integration, consolidation, rational pricing and innovative products, led by a demanding consumer are likely trends that will shape things to come.
Globally, Islamic banking assets are said to be growing twice as fast as conventional banking assets and expected to reach $1.1 trillion (Dh4.04 trillion) in 2012, up 33 per cent from 2010, according to a Ernst & Young study.
Global takaful contributions are forecast to reach $12 billion by the end of 2012, after expanding by an annual average growth rate of 19 percent in the past two years.
Takaful is an Islamic insurance concept, which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law, otherwise known as Shari’ah.
There are an estimated 230 takaful companies and another takaful re-insurer with an estimated $11 billion in volume.
The Sindh High Court on Thursday restrained the Securities and Exchange Commission of Pakistan (SECP) from implementing the Takaful Rules, 2012 issued by it while hearing a constitutional petition filed by five takaful companies challenging the Takaful Rules, 2012.
The five takaful companies that filed the petition are Takaful Pakistan, Dawood Family Takaful, Pak-Qatar Family Takaful, Pak-Qatar General Takaful and Pak-Kuwait Takaful Company.
Spurred by petroleum-related and other revenues, Takaful insurance and reinsurance (“ReTakaful”) markets are emerging. Contracts from these markets may soon represent a typical source of additional capacity for an international corporate policyholder. Takaful contracts are intended to comply with Islamic religious – Sharia – law, however. Therefore, policyholders should carefully consider how – and under what law – their claims may be handled.
The Saudi insurance market is projected to grow by 15 percent per annum in total volume of gross premiums written (GPW) across the sector, driven primarily by demand from the Kingdom’s young population, especially for motor and medical insurance, Standard & Poor’s Rating Services said in its recent report titled "Cooperative & Takaful Insurance in Saudi Arabia in 2012".
Author of the report David Anthony said "the sector constitutes an already large and still expanding market in a country, which in many ways dominates the region.
Global Islamic insurance sales rose nearly 20 per cent to US$8.3 billion (Dh30.48bn) in 2010, but opportunities still abound for further expansion, a new report has found.
Takaful contributions in the UAE grew by 28 per cent to reach $818 million during the year, said Ernst & Young's World Takaful Report 2012.
Over the past decade, Islamic finance has gained visibility especially with the ongoing financial crises, making the general public curious about its functionality and how it withstood the pressures of the global meltdown.
Hawkamah, in its recently launched Policy Brief on Corporate Governance for Islamic banks and Financial Institutions, identified a knowledge gap concerning Sharia-compliant finance, which needs to be addressed as Islamic finance enters mainstream finance.
Global Islamic insurance contributions surged 19 percent in 2010 to $8.3 billion helped by Saudi Arabia, the world’s biggest oil exporter, which made up more than half the industry, an Ernst & Young report said.
The six-nation Gulf Cooperation Council, which also includes the United Arab Emirates, Qatar, Bahrain, Oman and Kuwait, made $5.68 billion of Islamic insurance or takaful contributions in 2010, and South East Asia $2 billion, according to the World Takaful Report 2012 e-mailed today.