Islamic insurer t'azur is looking to make acquisitions in the Gulf and Middle East regions, aiming to tap Saudi Arabia's rapid population growth in particular, its chairman said.

Sheikh Abdul-Aziz bin Naif Al-Orayer said t'azur was in talks to buy either an Islamic insurance, or takaful, company or a conventional insurer and could make an acquisition this year if it found the right opportunity.

'Saudi Arabia is a big market and takaful penetration is only 1 percent and there is high population growth,' Al-Orayer told the Reuters Islamic Finance and Banking Summit in Dubai.

Under takaful the risk and reward are shared between the customer and insurer, while in conventional insurance the insurer takes on all the risk for a premium.

The takaful market is in a better position to weather the global economic downturn than the conventional market, Al-Orayer said.

'We have seen the likes of AIG and others burning so many people, so even in the west people are looking at takaful on ethical and not just religious grounds,' he said.

T'azur, which offers family and general insurance, started operations in Bahrain and Kuwait last year and has an initial authorised capital of $500 million. - Reuters