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Member, Beacon International Group, Ltd.
MANAMA, BahrainTakaful insurance is spreading beyond the Middle East where nearly half of all Islamic coverage is written and will make significant inroads into Europe and the United States over the next eight years, an executive with a takaful insurer says.
Gross premiums in the takaful market amount to between $1.7 billion and $2.3 billion worldwide, with 46% of the coverage written in the Middle East, according to Ashraf Bseisu, general managerfinance and corporate management at Solidarity, a Manama, Bahrain-based takaful company.
By 2015, the takaful market will attract from $7.4 billion to $14 billion in gross writings, with 27% of it originating in Europe and the United States, he said.
Speaking at the 4th Annual Middle Eastern Insurance Forum in Manama on May 9, Mr. Bseisu said, "We believe very strongly, particularly in Europe," that the potential is great for the growth of takaful writings.
By 2015, Asia will be the biggest producer of takaful premiums with around 46% of the market, he noted, while the Middle East should account for an amount similar to that of Europe and the United States.
"It is definitely a force to be reckoned with," he noted. "We are talking about very substantial growth."
One obstacle takaful companies face in their expansion is a lack of investment products that comply with Islamic law, according to Jon McMullen, a speaker at the forum and senior vice presidentratings of the Islamic International Rating Agency in Manama. "You have to invest this money in something," he said of takaful companies' income. "There is a scarcity of Sharia (Islamic law)-compliant investments available.