50
FIGURE 11: T OP G LOBAL T AKAFUL MARKETS 2017
Source: Thomson Reuters (2018)
Based on IFSB (2019), there was 6.9% CAGR between the years 2011-2017 in the global Takaful
industry. In the Gulf Corporation Council (GCC), there was 6.87% decrease by 2017, whereas
there was 8.2% increase in MENA markets in the same period. In 2017, Takaful contributions in
South East Asia (SEA) is estimated to have reached US$ 3.86 billion up from US$ 2.82 billion in
2016. In Sub-Saharan Africa, even though the market growth is insignificant (US$ 10.2 million),
it is believed the region has a tremendous market potential for Takaful.
4.2. Trends in Global Regulation of Takaful
Modern trends in Takaful can be viewed from three main perspectives: regulation and
governance, products, and Shari'ah compliance. First, from the regulatory and governance
perspective, there have been significant developments in different jurisdictions, which led to the
emergence of different governance models. The international regulatory landscape remains
dominated by the IFSB and AAOIFI through soft regulatory standards (AAOIFI, 2014; Bhatty,
2010; Ullah, Khanam, & Tasnim, 2018).
The IFSB has published five standards and guiding principles regulating the Takaful Industry.
The standards and guiding principles are identified in below. In addition to these
standards, there are other general standards issued by IFSB for IFIs that are applicable to TOs.
These include standards on governance framework, the conduct of business, stress testing and
liquidity management (IFSB, 2013). Many jurisdictions across the world, particularly members
of the IFSB, have adopted the above standards amongst others. The implementation of the three
IFSB standards relating to Takaful by Regulatory and Supervisory Authorities (RSA) in 2016 as
depicted in Figure 12 below highlights the significant improvement in the adoption of the
standards (IFSB, 2017).
15 12 9 3 1,5
35
26
20
53
15
0
10
20
30
40
50
60
0
2
4
6
8
10
12
14
16
Saudi Arabia Iran Malaysia Indonesia UAE Total Assets (US$ Billion)
Takaful Assets (US$ Billion) Number of Takaful Operators*