Takaful market booming in GCC
A new Ernst & Young report has revealed that the Gulf Co-operative Countries (GCC) are at the heart of the worldwide Takaful market. In 2006 the GCC contributed US$1 billion towards the global Takaful market total of $2 billion.
Takaful, an Islamic insurance concept based within Islamic banking law, is booming. According to Ernst & Young, the Takaful market is growing at an annual rate of 20%. The group are forecasting a worldwide Takaful market worth $4.3 billion by 2010, and reaching $10-15 billion within the next decade.
Worldwide there are 133 Takaful operators. 59 of these operate within the GCC countries of Saudi Arabia, Qatar, Oman, Kuwait, Bahrain and the United Arab Emirates.
The growth of Takaful in the region is being fuelled by high economic growth, a young population, and a desire to conform with Islamic law.
Under the Takaful system, members contribute money into a pooling system. This guarantees all those in the pool against loss or damage. It is based on the Islamic responsibility to co-operate with and protect those in the Muslim community.
Ernst & Young’s head of Islamic finance, Sameer Abdi, says that the biggest challenge for Takaful is developing a competitive alternative for conventional insurance.
Category: Financials, Insurance News
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