“The takaful industry attracted approximately $11 billion in gross contributions worldwide in 2012 and recent reports indicate that the industry is expected to grow by 16 per cent annually in the coming years to hit $17bn by 2015. However, this projection indicates a slight deceleration when compared with the average 22 per cent growth rate that the industry achieved between 2007 and 2011. Though the industry has achieved significant market share in its key markets, including Saudi Arabia, Malaysia, Bahrain and the UAE, the acquisition of market share has not necessarily translated into sustainable profitability levels in many instances. Financial performance, RoE and the quality of growth remain key challenges for takaful operators in many markets,” says David McLean, chief executive of the World Takaful Conference.
He also said that with key rapid-growth markets poised to become the new centres of Islamic finance development in the next decade and with the development of supporting regulatory infrastructure in key markets, the global Takaful industry has significant opportunities for growth.
“The takaful industry has grown significantly as a viable Islamic alternative to conventional insurance. Although the global takaful industry has witnessed strong progress, the development of related regulatory and supervisory frameworks has not kept pace and varies substantially between key takaful markets. In many key countries, the takaful market is becoming increasingly over-crowded with a number of domestic and international companies competing for a small pool of risks to cover. Industry wide profit margins have been under pressure and previously strong growth rates have started to decelerate,” says Mohammed Al Awar, CEO of the Dubai Islamic Economy Development Centre.
Al Awar is set to inaugurate the ninth Annual World Takaful Conference 2014 will be opened on the April 14, 2014.