Islamic insurance (takaful) is estimated to grow to $3.519 billion (Dh12.91) by the end of 2010 in the Gulf and the industry would grow at a faster pace than conventional insurance, while the compound annual growth rate (CAGR) is expected to be 16.1 per cent during 2009-2012 period, said a research report.
Tommy Trask, Executive Director and Head of Industry Research Services, Alpen Capital, said: "Favourable demographics, growth in organised savings, Islamic finance, regulation and increasing affluence would be key contributors to the growth in GCCs takaful industry. It would grow faster than conventional insurance. Within the GCC, Saudi Arabia, UAE and Bahrain have been showing good growth."
Alpen Capital has estimated nominal growth at $3.133bn in 2009 and $3.808bn in 2010.
The industry, however, continues to face challenges in improving efficiencies and reaching critical masses so as to gain from economies of scale. Currently, the largest GCC takaful players are doing that, though a lot more needs to be done in the direction, added Trask.
Healthy growth
In the period from 2006 to the third quarter of 2009, the top-eight GCC Takaful firms registered CAGR of 26.5 per cent compared to 19.2 per cent for their conventional peers, the report said.
"The GCC takaful industry is bucking the trend in the broader economy and continues to grow at a healthy pace. The leading takaful firms in Saudi Arabia, the UAE and Bahrain, have performed relatively well, while those in Kuwait have had a somewhat challenging year in 2009.
"While there are reasons to remain cautious about growth in the near term, we expect the takaful industry to continue to grow faster than GDP (non-oil) for the foreseeable future," it said.
Taking the current macro economic environment and other factors into consideration, Alpen researchers expect the market to grow approximately at nominal CAGR of 20.7 per cent and a real CAGR of 16.1 per cent during 2009-2012.
The industry recorded a strong performance in the first three quarters of 2009, particularly in the third quarter, researchers noted.
In January this year, the Saudi Commission for Tourism and National Heritage announced that regulations were being finalized for the much-anticipated visas that will, for the first time, allow foreig
Complementary, not competitive — this ethos must be etched into the global energy playbook. Sleeves must be pulled up to ensure that the BP Outlook’s forecast of a 49 per cent increase in energy cons
Saudi Arabia's economy is entering a post-oil era in which the kingdom's mega-cities, a number of which are under construction, will provide the country's future growth, Riyadh officials told CNBC on
Please wait...
