Takaful - UAE: Takaful expected to form 35% of total insurance mart by 2021
Source: Middle East Insurance Review | Jun 2016
Takaful companies, which collected 17% of total premiums written in the UAE last year, could see their market share rise to 35% within the next five years, according to Mr Jihad Faitrouni, CEO of Dubai Islamic Insurance and Reinsurance Company (Aman).
Mr Faitrouni said: “The UAE enjoys great prestige in the field of takaful at the regional and global levels, and have all the elements needed to take the lead in this area.”
However, he also said that the Islamic insurance sector in the country is facing huge challenges in the technical and investment arenas, reported the Argaam financial publication.
On the technical side, the big challenge is the large number of competitors. There are currently about 10 takaful companies in the UAE which also have to compete with conventional insurers. The total number of insurers in the country, including Islamic insurance companies, is around 60.
He said that there is a need to achieve a balance between investment and insurance. He noted that some takaful operators placed strong focus on investments. He saluted the Insurance Authority for introducing regulations last year governing the financial, technical, investment and accounting operations of takaful operators and conventional insurers. Among other things, the rules place limits on investments made by Islamic and conventional insurers.
He stressed that takaful operators should not rely on marketing themselves as companies compliant with Islamic law. Instead, they must raise the quality of services provided to customers as their competitive edge.