Many of the numbers that are bandied about that claim to represent a measure of the size of the global takaful market have to be treated with some degree of scepticism.
However, if we presume that the global takaful market reached around $34bn in 2023, at least it offers a starting point.
Looking back 20 years, estimates suggest the market was worth around $3bn. At first glance, this looks like impressive growth – albeit from a small base.
But if we consider that the global insurance market is estimated to be worth around $6tn today – and we are constantly reminded that Islam is the fastest-growing religion in the world – perhaps we could have hoped for more.
There can be few senior executives in the takaful sector who are not acutely aware of the reasons behind the slow growth and low penetration rate, but steps to rectify the situation seem painful and slow.
It is perhaps worth emphasising that this malaise seems to affect the entire Islamic finance sector and is not unique to takaful.
It is also possible that corporate takaful leaders are not taking advantage of every opportunity to boost awareness of the benefits and suitability of their products.
The crux of the problem is perhaps best illustrated by an initiative called Islamic Banking as a Duty (www.ibaad.academy) (IBAAD), established by First Global Academy founder and CEO Muhammad Ikram Thowfeek.
One of the aims of IBAAD is ‘empowering 1m Islamic finance literates by 2030’ through its Islamic finance literacy programmes aimed at beginners and bringing conventional best practices of insurance to takaful.
It seems obvious that this sort of initiative is geared precisely to helping boost the uptake and understanding of takaful – and Islamic finance in general. However, this is a furrow that Mr Thowfeek is largely ploughing alone.
“I have taken a solo journey to spearhead educating at the grassroots about Islamic finance and have gained traction over the past six months. Unfortunately, many big players who I know and have interacted with are still to come on board to support,” he told us.
The big brand names in the conventional insurance and reinsurance sector are not shy about promoting their involvement in many ‘non-core’ activities such as the Dive In Festival, DEI initiatives, supporting resilience and climate-change mitigation causes and so on.
Cumulatively they spend billions of dollars on this – because they know that they are growing their brands while also making their company name top-of-mind for graduates leaving university and hoping to get a career in finance.
There is no denying that the war for top young talent is fierce and getting fiercer.
Perhaps takaful players could take a leaf out of this book and link their brands with Islamic-finance-friendly initiatives aimed at the next generation of takaful leaders and customers alike.
The world of conventional finance has been around a very long time, and it has learnt many lessons along the way. It might not be such a bad idea to borrow some of these ideas to boost the takaful sector. M
Paul McNamara
Editorial director
Middle East Insurance Review