Takaful
The Takaful market in the Middle East is set for a boom over the next few years. Recent predictions at the Takaful 2008 conference (April 2008) noted that the industry is set to increase to US$10 billion by 2015 – the figure for 2007 stands at US$5 billion (Reported at the Takaful 2008 Conference in April 2008). Total premiums written by Takaful insurers are set to reach 9% of the world’s insurance market share by 2010.
Bahrain is rapidly being established as the leader in this field. It was the first market to introduce regulations for Takaful companies that met with Accounting & Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards. It is anticipated that with high levels of regulation it will encourage further growth of Takaful business in the Kingdom, as Takaful needs a high standard of regulation to succeed.
The rise in demand for practice of Takaful in Bahrain is evident by the number of the big conventional insurance companies that have created a Takaful arm of their business in order to capture this market – for example, Allianz Takaful Bahrain, AIG Takaful and Hannover Re Takaful, and Legal and General Gulf Takaful. Currently Bahrain is home to 15 such firms, and one Re-Takaful firm (Source: Central Bank of Bahrain Quarterly Statistics, March 2008) – this is the reinsurance arm of Takaful.