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Thursday, 17 April 2008

Takaful eyes new markets

(Daily News, 15 Apr 08)

MANAMA: The US and Europe are to become major new markets for Islamic insurance, according to the Bahrain-based Solidarity Group.
Speaking at the World Takaful Conference in Dubai yesterday, the firm's deputy chief executive Ashraf Adnan Bseisu argued Sharia-friendly insurance would appeal to Western consumers looking for "ethical" options.
The firm was looking at ways to export its products to the US, he said.
Sales of takaful in the US and Europe are expected to surge over the next decade, with the market share growing from just one per cent to 27pc by 2015. "There is no doubt the US and Europe have great potential. Takaful is not the sole prerogative of Muslims. The Western population are looking for morally sound products. We should not neglect the US," said Mr Bseisu.
Asia currently has a 53pc share and is expected to remain the dominant market.
But the importance of the Middle East market is expected to dwindle, with its share of global takaful premiums dropping from 46pc to 27pc.
But the Solidarity chief also pointed out that the difficulties of entering the tightly protected US market were considerable.
The lack of industry-wide standards and regulations would hinder development of the sector. Takaful firms hoping to list on the stock exchange would also need to bring their accounting standards up to scratch and improve transparency.
More work also needed to be done to improve information about the market, the sector is currently undermined by drastically differing figures.
Five different presentations at yesterday's conference produced five different sets of statistics, prompting calls for a dedicated body to produce more "credible" sums.
"Don't simply mimic traditional insurance," was the message from Abu Dhabi National Takaful Company general manager Ossama Kaissi.
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