S&P Sees Continued Growth of Islamic Takaful in Risk Transfer Market

Standard & Poor’s Ratings Services said that it expects the global takaful sector to continue its rapid growth and to become a significant contributor to the global “risk transfer” market place.

The world’s Islamic population is estimated to comprise some 25 percent of the global total: a meaningful “risk-transfer” market by any standard, according to S&P. Because Islamic scholars consider the classic risk transfer model through insurance to be unacceptable for use in Islamic communities, the Sharia-compliant “takaful” model has become increasingly popular in a region where insurance markets are otherwise very poorly developed.

“The takaful model has come to be considered a key factor in increasing insurance awareness and delivering a successful, expanding business platform,” said Standard & Poor’s credit analyst David Willis.

S&P has authored an article, “Takaful Spreads Its Wings As An Alternative Insurance Business Model.”

Source: Standard & Poor’s Ratings Services