Takaful industry sees rapid development in emerging markets (By IFN)

GLOBAL: Growth of Takaful globally may have lagged that of the wider Islamic financial space, but new developments in emerging markets for Islamic insurance have created a new growth momentum for the industry.

In Oman, which just adopted Islamic finance this year and has seen the launch of a handful of Islamic banks and Islamic banking windows, the Capital Market Authority (CMA) is reviewing a draft law which includes rules on the formation of Takaful operators.

The proposed law, which also covers rules on Sukuk, was drafted by law firm Clifford Chance. According to reports, the CMA is also consulting the draft with other bodies, such as the IFSB. It hopes to prepare a final draft sometime in September 2012.

The CMA has already granted three approvals in principle for insurance companies to set up Takaful operations, among them Al Madina Insurance Company, which has set its sights on converting into a Takaful firm and offering Life, medical and non-Life Takaful products. The authority is also expected to stipulate separate businesses with separate licenses for conventional insurers seeking to enter the Takaful market.
Meanwhile, MetLife Alico Bangladesh is reportedly considering a venture into Takaful, due to strong demand for Takaful products in Bangladesh. Akhlaqur Rahman, its chief operating officer, is also quoted as saying that the viability of the industry in Bangladesh has improved due to the availability of Shariah compliant investments.

On another note, Kenya Reinsurance Corporation is in the midst of setting up a Shariah board to oversee its planned re-Takaful operations. In a report, Jadiah Mwarania, its managing director, said the firm has tied up with Total Risk Solutions, an Australian consulting firm, to educate Kenya’s market on Takaful.

While markets such as Pakistan has seen doubt cast over the development of its Takaful industry as its newly released rules on the industry were blocked from implementation by the Sindh High Court, there may still be some hope yet for the industry to enter a new growth trajectory on developments from other markets around the world.

See: http://redmoney.newsweaver.co.uk/1g0k47v6o2zh38rwoni3wx?email=true&a=6&p=26441485&t=21779755