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in 2018 and increased by 4.6% from MYR 4.74 million in 2017. The Takaful industry added
699,534 new certificate holders in 2018, 4.6% more compared to 668,657 new certificates in
the year 2017. Meanwhile, the General Takaful industry had a decent growth of 8.9%with gross
contribution amounting to MYR 2.79 billion compared to MYR 2.56 billion in 2017(MTA, 2018).
After analysing the overall Malaysian Takaful market, some lessons are conspicuous to observe.
Firstly, a regulatory evolution and a short-term slowdown in growth. Secondly, the
sustainability of pension schemes and retirement plans.
Saudi Arabia
Saudi Arabia is the largest Takaful market in the world with 38%of global Takaful contributions,
followed by Iran (34%), Malaysia (7%) and the UAE (6%) (IFSB, 2018). However, as a result of
the economic slowdown, mainly due to low oil prices, the growth of Takaful sector in Saudi
Arabia has moderated. The Takaful industry of Saudi Arabia is based on cooperative model
enforced by the Cooperative Insurance Companies law issued in 2005.
It is important to note that the Saudi Arabian insurance industry and its legal framework has
relatively a long history, which is backdated to the third decade of the last century with the
entrance of the international oil companies into country exploring the hydrocarbons as they
have insured their equipment, labours, and the oil tankers.
The Gross Written Premiums (GWP) of General insurance grew from SAR 3.6 billion to SAR 14
billion over the period from 2005 to 2018. Meanwhile, Health insurance grew from SAR 1.4
billion in 2005 to SAR 19.9 billion in 2018. On the other hand, life insurance GWP rose from SAR
193.2 million in 2005 to SAR 1,008.3 million in 2018.
After analysing the overall Saudi Arabian Takaful market, it appears that there are some issues
that need to be resolved for further development of the industry in the country, e.g. the need for
Shari'ah regulatory framework for the Takaful industry and the availability of Re-Takaful
companies to cater to the need of the Takaful industry.
Turkey
Even though the modern Islamic banking and finance is a relatively recent phenomenon in
Turkey, the World Islamic Banking Competitiveness Report highlighted that Turkey has solid
potentials to contribute to the global growth of the Islamic finance industry due to strong
support from the government. Recently, there has been a significant success in the growth and
development of the Takaful sector in Turkey with the emergence of new players. The market
share of Takaful increased rapidly after the introduction new companies. As of 2018, the total
market size of participation insurance (Takaful) was TRY 2.23 billion while it was only around
TRY 383 million four years earlier. However, the size of the Takaful sector compared to the total
insurance market is very small, though it increased significantly from 1.5% to 4.3% over the
period from 2014 to 2018.