Takaful Insurance Market: Global Opportunity Analysis and Industry Forecast, 2023-2032
Takaful is a type of Islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage.
WILMINGTON, DELAWARE, UNITED STATES, November 21, 2023 /EINPresswire.com/ -- Takaful insurance is based on sharia or Islamic religious law, which explains responsibilities of individuals to cooperate and protect one another. Generally, takaful policies cover health, life, and general insurance needs. While having risk-sharing model concept, takaful insurance remains largely confined to the Muslim countries. In addition, takaful insurance is considered as the main form of insurance in Muslim majority countries. Hence it is considered as an important factor boosting the takaful insurance industry. Moreover, in takaful insurance, the investment profits are distributed among the participants and premium amount collected from the members is returned back, in case there are no claims.
Thus, these are some of the major factors that propel the takaful insurance market growth. Furthermore, takaful adheres to Shariah rules, which restrict certain financial practices like interest (riba) and uncertainty (gharar), by operating on the tenets of reciprocal assistance, shared accountability, and ethical investment. With the intention of providing insurance while upholding Islamic ethical and financial standards, policyholders partake in the gains and losses of the Takaful fund.
The global takaful insurance market was valued at $31.7 billion in 2022, and is projected to reach $126.8 billion by 2032, growing at a CAGR of 15.2% from 2023 to 2032.
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Growth in demand for takaful insurance across Muslim-majority has significant driver for the expansion of the takaful insurance. A growing middle class and strong economic growth have been seen in several nations with a majority of As people's financial circumstances improve, they are more interested in using insurance to protect their possessions and well-being, and Takaful offers a Sharia-compliant choice. Furthermore, distribution of investment profit among both participants are driving the takaful insurance market. However, lack of standardization in takaful insurance due to regional difference are hampering the takaful insurance market. Takaful operations and products may differ from one country or region to the other due to differences in regulatory structures, Shariah boards, and practices. This lack of uniformity makes it difficult for takaful operators to operate internationally and hinders the growth of a united global Takaful market.
Segment Review
The takaful insurance market is segmented on the basis of type, distribution, application and region. Based on type it is segmented into family takaful, and genral takaful. By distribution, the market is segmented into agents and brokers, banks, direct response, and others. On the basis of application it is segmented into personal, and commercial. By region, it is analysed across GCC, MEA, Asia, and Rest of World.
Market Landscape and Trends
The Takaful market has experienced substantial growth, with increasing demand from Muslim-majority countries as well as non-Muslim-majority regions. This expansion is driven by the ethical and Shariah-compliant nature of Takaful insurance, which resonates with a diverse range of consumers. Furthermore providers of takaful have expanded their product lines to appeal to a wider market. This covers, among others, investment-linked Takaful, general Takaful, family Takaful, and health Takaful. A wider client base has been drawn in thanks to this diversification. Moreover, operators of takaful are reaching out to markets outside of their home countries. They are reaching out to the Muslim community around the world as well as non-Muslims who are looking for inclusive and moral insurance choices. Collaborations and mergers with foreign insurance companies are also on the rise. In addition, the landscape of Takaful is changing because of digital technology. Accessibility and customer interaction are increasing because of online distribution channels, smartphone apps, and digital underwriting procedures. Takaful providers are able to streamline operations and improve customer experiences because of insures advances.
Growth in demand of takaful insurance across Muslim majority countries.
Due to factors such as uncertainty of business losses, medical conditions, hospitalization and others, usury, and gambling, are often included into the practices of conventional insurance and are usually considered to be unethical by the Islamic law. Hence, conventional insurance is sometimes rejected by the Islamic Sharia law, since these practices are against the teachings of Islam. Moreover, in order to benefit from insurance and stay away from such practices, takaful insurance has been recommended by experts in Islamic finance. Furthermore, a growing middle class and strong economic growth have been seen in several nations with a majority of Muslims.
Distribution of investment profits among both participants
In takaful insurance, usually there is a surplus amount left after all the claims are resolved and those amounts are shared among the participants. Since the premium is considered as a donation by the participants, a small portion of surplus amount is given to the organizer of the takaful for managing the process of insurance. While the rest of the amount is distributed equally among the participants. Furthermore, takaful insurance that distinguishes it from conventional insurance is the distribution of investment profits among both participants (policyholders) and the Takaful operator (insurance company). Moreover, the Takaful operator serves as the fund manager in this arrangement, with participants (policyholders) serving as investors. According to a pre-determined profit-sharing ratio, the operator and participants split any gains made by investing in the participants' contributions.
Lack of standardization in takaful insurance due to regional difference
There is a significant regional difference in consumer’s attitudes and tolerance toward takaful insurance, which makes it difficult to standardize the process of takaful. For example, Malaysia is perceived to be more liberal and willing to adopt modern conventional concepts within the takaful framework. In contrast, the approach in the Middle East countries is more conservative, with less willingness to embrace modern conventions. Furthermore, customers and potential participants may be confused by regional variations in Takaful practices and frameworks. Due to their difficulty in comprehending the differences in products and operations, this complexity may discourage people and companies from implementing Takaful insurance.
Lack of consumer awareness.
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Key Benefits for Stakeholders
This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the takaful insurance market analysis from 2022 to 2032 to identify the prevailing takaful insurance market opportunity.
The market research is offered along with information related to key drivers, restraints, and opportunities.
Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
In-depth analysis of the takaful insurance market segmentation assists to determine the prevailing market opportunities.
Major countries in each region are mapped according to their revenue contribution to the global market.
Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
The report includes the analysis of the regional as well as global takaful insurance market trends, key players, market segments, application areas, and market growth strategies.
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Takaful Insurance Market Report Highlights
By Application
Personal
Commercial
By Type
Family Takaful
General Takaful
By Distribution Channel
Agents and Brokers
Banks
Direct Response
Others
By Region
GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman)
Asia-Pacific (Malaysia, Pakistan, Indonesia, Brunei, Rest Of Asia)
Middle East and Africa (Iran, Jordan, Sudan, Egypt, Nigeria, Rest of Middle East And Africa)
Rest of ME (Turkey, Sri Lanka)
Key Market Players: Qatar Islamic Insurance, SALAMA Islamic Arab Insurance Company, Prudential BSN Takaful Berhad, Zurich Malaysia, Abu Dhabi National Takaful Co., AMAN INSURANCE, Allianz, Takaful International, ISLAMIC INSURANCE, Syarikat Takaful Brunei Darussalam
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