The market for Islamic insurance, or takaful, could reach US$11 billion (Dh40.4bn) if Sharia-compliant investment opportunities such as sukuk are increased, according to industry sources.
“The challenge is the long-term asset base and investment market,” said Abdulrahman Tolefat, the chief executive of Allianz Takaful. It was difficult to find long-term sukuk to match the duration of retirement schemes and offer annuities, he said.
Islamic insurance has grown at a rate of about 25 per cent in recent years, but faces fierce competition from conventional insurers who are also setting up takaful products. Contributions to Sharia-compliant insurance totalled about $7bn in 2007.
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