Perspectives

The way forward for Takaful

Spotlight on growth, investment and regulation in key markets

This study marks the beginning of a new approach in the field of Islamic Finance which aims to promote a culture of industry-driven research.

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Increasingly, many Takaful organisations are realizing the need to address the regulatory compliance and investment risks that threaten strategic objectives around growth and profitability. Equally, industry executives recognise the importance of implementing good governance practices to facilitate compliance and devise well-balanced investment strategies to realise growth and sustainability.  

This report builds on a previous study on the global Takaful insurance market, and looks more deeply into the core Takaful markets in the Middle East and South Asia. The analysis and discussion are formed around building case studies on those markets. The research team examined in brief the economic and regulatory environment in six selected countries, three from each region. The goal was to bring to the discussion an update on developments on both regulatory and economic fronts.  

A detailed analysis of the insurance sector and Takaful was made through cross-examining the financial performance and investment strategies for a selected group of prominent Takaful firms. The main business and economic drivers and factors underpinning the growth of Takaful business in those countries were discussed with analysis and rationalization.  

More importantly, this study marks the beginning of a new approach in the field of Islamic Finance which aims to promote a culture of industry-driven research. This aspiration was shared by Deloitte Middle East and two prominent research institutions – the International Centre for Education in Islamic Finance (INCEIF) and Henley Business School, University of Reading. As such, this study is a strategic collaborative research initiative aimed at promoting industry-sponsored research in Islamic Finance, and this report demonstrates the value of collaborative work and resource sharing to address practical and regulatory issues in the industry. 

This industry research benefited from two important factors that added valuable inputs into the research process and implementation. The first is a group of student researchers at INCEIF who carried out the desk research and preliminary analysis of markets in South Asia, while the second is a sponsorship from FWU Group.  

Finally, and as in past thought leadership publications, the last section of ‘Thought leaders’ perspectives’ invited and engaged prominent industry thought leaders and practitioners to share their insightful views on issues discussed. We are grateful for their valuable support in taking part in the debate and enriching the industry-wide dialogue to harmonise global industry practices. 

 

The way forward for Takaful
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