Global Takaful contributions are expected to touch $12 billion at the end of this year, and could reach$25 billion at the end of 2015, said experts at a recently concluded international Takaful summit in London.

This is a steep rise from the Takaful contributions of $9.15 billion in 2010, pointed out Ernst & Young’s experts at International Takaful Summit 2011.

“If we continue with the 2009 growth rate of 31 per cent or higher, we will clearly touch the $25 billion mark in 2015. 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,” said Ashar Nazim, Mena head of Islamic Financial Services, Ernst & Young, terming Takaful “the default choice for Islamic countries”.

The Takaful market is only one per cent of the global insurance market at present, even though Muslims make up 20 per cent of the global population.

“In addition to emerging markets, Muslim countries are expected to increase the adoption of Takaful and related instruments in the coming years. We expect Takaful to be the default choice for Islamic countries in the future,” added Nazim.

The Takaful industry today is concentrated mainly in the Mena region and in Malaysia, but its future growth markets are the most populous countries of Indonesia and the Indian subcontinent, followed by the African sub-continent and the CIS countries, he said.

Saudi Arabia, Malaysia and the UAE are the top three Takaful markets while Egypt, Sudan, Bangladesh and Pakistan are growing at a rapid pace.

Abid Shakeel, Islamic Financial Services, Ernst & 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, which is widely regarded as more mature and where family Takaful dominates, is expected to be increasingly followed by the rest of the world.

The family Takaful market remains underpenetrated as it is estimated to currently contribute only 5 per cent in the Mena region compared to 77 per cent in Malaysia.

“If we look at contributions per Takaful operator, Malaysia leads the world at $115.8 million. It is followed by GCC at $63.5 million, the Indian subcontinent at $16 million, Africa at $11.8 million and the Levant at $4.3 million. There is a tremendous amount of catching up to Malaysia that we could see happen in the future,” added Nazim. – TradeArabia News Service