Global takaful contributions to hit US$7 bln in 2015
Aug 7th, 2008 by Takaful
Source: Bernama, 7th August 2008
Global takaful contribution is expected to reach US$7 billion(US$1.00 = RM3.28) by 2015 from more than US$2 billion last year amid higher growth potential and increasing demand, said Takaful Ikhlas Sdn Bhd president and chief executive officer Syed Moheeb Syed Kamarulzaman.
He said the past few years have seen growth rates of around 20 percent, indicating high growth potential in the years to come due especially to the present low rate of takaful or Islamic insurance market penetration.
“The takaful and retakaful industry will continue to show rapid growth momentum and is increasingly being recognised as one of the major components of the overall Islamic financial system,” he said at the 2008 Global Forum on Islamic Finance here Thursday.
Syed Moheeb said Malaysia has recorded a commendable track record in the takaful industry since its inception two decades ago.
He said last year the total assets of the takaful funds stood at RM8 billion or US$2.5 billion.
“This represents 6.8 percent of the entire takaful and insurance industry funds asset, while in terms of net contributions, RM2.5 billion was recorded last year, an increase of 47 percent from 2006,” he said.
On the trend of global takaful, Syed Moheeb said there was growing international consensus on the need to have a strategic direction for an orderly development of the global Islamic finance industry.
He expected the industry to continue to present high growth potential with greater sophistication and innovation of products and services in the market.
The number of Takaful operators, which currently stands at more than 120 is set to increase, he said, adding that there was growing participation of major conventional payers in the takaful and retakaful industry such as Prudential, Fortis, Tokio Marine Nichido and the AIG.
Syed Moheeb said the growth of the global sukuk market could potentially become a key supporting factor for the strong growth of takaful and retakaful industry.
“Sukuk is increasingly becoming an important investment avenue for the takaful industry. The market is experiencing remarkable growth, increasing at an average rate growth of 40 percent per annum,” he said.
He said the global sukuk market, denominated in international currencies is estimated to have exceeded US$80 billion as at end of 2007.