Family takaful to drive Islamic insurance.
DUBAI - Islamic insurance, or takaful, will continue to be among the fastest growing sectors in the Gulf and Malaysia, with life insurance providing the greatest opportunity for profitability, a study by A.M. Best said.
Among the 131 takaful operators and conventional companies surveyed, life insurance, or family takaful, made up less than 25 per cent of the contributions received but offered higher margins and stability, said analyst Vasilis Katsipis.
"In 2011, the financial performance of family takaful operators will be higher than that of the conventional life insurers," Katsipis wrote in the study.
Family takaful, with a compounded annual growth rate of 22 per cent between 2004 and 2009, also outpaced growth in the conventional life insurance market which grew by 5 per cent over the same time period. -- Reuters
During the same period, the sector also delivered a higher return on life premiums of close to 15 per cent as compared to growth of 7.3 per cent to 9.4 per cent for its conventional counterpart, the survey by the insurance ratings agency said.
General takaful, however, has seen varied profitability in the Gulf, although Malaysia has seen more stable growth and combined ratios ranging from 93 per cent to 74 per cent between 2004 and 2009.
Gulf Islamic insurers, which have only recently emerged on the scene, have suffered from a dip in the economy and intense competition with conventional insurance companies.
Copyright 2011 Khaleej Times. All Rights Reserved.
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|Publication:||Khaleej Times (Dubai, United Arab Emirates)|
|Date:||Jul 12, 2011|
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