Islamic Finance World Wide Report

One of  the three major components of Islamic fi nance, the takaful aspect has experienced slow growth in terms of range of products and expansion around the world. Despite these initial challenges, takaful remains a promising component of the global Islamic fi nance industry. From the available data, the takaful industry is currently concentrated in South-East Asia and the Middle Eastern and North African (MENA) countries, as shown in the fi gure. Although takaful has been less a_ ected by the global financial meltdown due to its concentration in emerging markets, there was a surge in the growth of the industry as a result of the paradigm shift on the part of international takaful giants such as the American International Group (AIG), which established AIG Takaful Enaya, headquartered in Bahrain.

(image taken from AIMS islamic fince university from the course of mba islamic finance)

According to Sameer Abdi, Head of Ernst & Young’s Islamic Financial Services Group: “Takaful markets now span much of the globe but there still exists a large, expanding and untapped Muslim population on almost every continent. We estimate that the global takaful market could be as high as US$7.7bn by the end of 2012.”5 Takaful operators need to diversify their products to

include new areas such as medical insurance and introduce frameworks to address complex risk issues. Partnering with international giants in o_ ering takaful products in Europe and America will further expand the market rather than concentrating on the MENA and South-East Asian countries. These key strategic issues need to be closely considered in the drive towards a

viable future direction and expansion of the takaful industry. There is much room for expansion of takaful products beyond the MENA region and South-East Asia. Potential markets such as Egypt, Nigeria, and Muslim minority communities in Europe and America should be the next focus. However, there is a need to restructure takaful products to be conventionally viable and competitive without violating any Islamic law precepts to be able to penetrate markets in Europe and America. The focus of the industry will now be turned towards the exploration of new international growth markets for takaful.

This article was written by my teacher when I was doing my islamic finance course 3 years before now iam sharing it for my students