Their research suggests that the global Takaful market could reach US$25bn by the end of 2015 compared to US$9.15bn in 2010.
"We expect that growth will be maintained, as the foundations of the Takaful market in Muslim countries and in emerging markets have already been laid.”
The Takaful market is 1% of the global insurance market even though Muslins are 20% of the global population but Mr Nazum said Muslim countries are expected to increase the adoption of Takaful and related instruments in the coming years.
The Takaful industry is concentrated in the Middle East, North Africa region and Malaysia however Ernest & Young claim the future growth of Takaful markets are most “populous” countries of Indonesia and the Indian subcontinent, followed by the African sub-continent and the CIS countries.
Saudi Arabia, Malaysia and the UAE are the top three Takaful markets while Egypt, Sudan, Bangladesh and Pakistan are growing at a rapid pace.
At a recent International Takaful Summit 2011 in London, Abid Shakeel, Islamic Finance Services at Ernest & Young said: “Legislation in the Islamic countries to make Takaful products the preferred choice among insurance products can place the industry on a completely different level. As we have seen, growth in the GCC is primarily driven by compulsory insurance rather than only voluntary policies.”
The Malaysian model is expected to be increasingly followed by the rest of the world. The family Takaful market remains under-penetrated as it is estimated to currently contribute only 5% in the MENA region compared to 77% in Malaysia.
Mr Nazum added that looking at contributions per Takaful operator, Malaysia leads the world at US$115.8m. It is followed by GCC at US$63.5m, the Indian subcontinent at US$16m, Africa at US$11.8m and the Levant at US$4.3m.
“There is a tremendous amount of catching up with Malaysia that we could see happen in the future.”
source: POST Online