Amwal Al Ghad English - 2013-10-21 07:51:34
Expansion of the takaful (Islamic insurance) industry is slowing as firms struggle for scale and face growing competition, but the sector is still poised to sustain double-digit growth, according to a report by Ernst & Young.
Takaful, an industry which attracted $10.9 billion in gross contributions worldwide last year, has its core markets in the Gulf and southeast Asia and serves as a bellwether of consumer appetite for Islamic finance products.
Driven largely by Saudi Arabia and Malaysia, takaful globally is expected to grow by 16 percent annually in coming years compared to an average 22 percent rate between 2007 and 2011, said Ashar Nazim, Islamic financial services leader at consultants Ernst & Young.
That would see the industry edge close to $17 billion in annual gross contributions by 2015, with Saudi Arabia making up almost half of that figure, the report showed.
But firms have expanded in narrow product segments such as auto insurance which are saturated by competitors, sparking price competition to gain market share, Nazim added. More»