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2) Malaysia with the dual banking and Takaful systems, and 3) Turkey with its emerging Islamic
finance industry. The study also includes the United Kingdom (UK) as a non-OIC country – an
economy with IFIs for more than three decades.
According to the Islamic Finance Development Report 2018 (Thomson Reuters, 2018), there are
1,389 full-fledged IFIs and windows worldwide. Over last seven years, the Islamic finance
industry has recorded a compound annual average rate of growth of 6%. It is also reported that
Iran, Saudi Arabia, and Malaysia continue to be the top significant market contributors to global
Islamic finance industry. Consequently, with the rapid growth of the industry, the Takaful
market has gained a high momentum, even though the volume of Takaful contributions is still
low compared to other segments of the Islamic finance industry.
It is also reported that the total assets of global Takaful industry grew up to US$ 46 billion in
2017 with 324 Takaful and Re-Takaful operating companies, including 112 General Takaful
Operators (TOs) and 76 Family TOs. Also, there are 113 composite Takaful companies and 21
Re- Takaful Operators (RTOs) around the world (Thomson Reuters, 2018).
On the top of the existing number of Takaful companies, the insurance markets of many
countries continue to embrace new Takaful players in response to growing customer demand
for the Takaful services. In this context, the study has analysed the performance and potentiality
of four countries – three OIC member countries (Malaysia, Saudi Arabia and Turkey) and one
non-OIC member country (the UK) – considering the economic and legal aspects to comprehend
the current development and position of this sector. A brief exposition of these countries’
Takaful sectors is summarised below:
Malaysia
Malaysia is the leader of the Takaful industry in the South East Asia. It has firmly established the
supportive infrastructures required for sustainable Islamic finance, particularly, in product
development, institutional establishment, as well as thought leadership. The governmental
support has always been a significant factor driving the growth of the Islamic finance market in
Malaysia, particularly in creating the proper infrastructure for Islamic finance to flourish.
Malaysia’s regulatory approach is to focus on adjustments of its regulatory environment in order
to facilitate the integration of Takaful and promote its growth through appropriate amendments
in the legislature. The positive growth of the Takaful industry inMalaysia is supported by several
drivers such as the resilient, ever robust regulatory infrastructure and conducive environment
created by the Central Bank of Malaysia – called ‘Bank Negara Malaysia’ (BNM).
The significant reforms introduced over the years have led to substantial growth in the Takaful
market. The total Family Takaful new business contributions grew by 13.1%, increasing from
MYR 4.35 billion in 2017 to MYR 4.91 in 2018. In 2018, the annual contribution for new business
showed moderate growth of 4.1%, while single contribution new business jumped to 16.6%.
The total Family Takaful business contributions grew by more than 11.8% to MYR 4.86 billion