UAE: Product development must take into account different jurisdictions

Source: Middle East Insurance Review | Oct 2019

Takaful products developed for a particular country/region should not be simply implemented in another, said Mr Muhammad Zubair Mughal, CEO, AlHuda Centre of Islamic Banking and Economics (CIBE) which recently organised a conference on Islamic insurance held in Dubai.

This is because one country differs from another in terms of GDP, religious sensitivity, and regulatory framework. The social, economic and religion dynamics could also be different.

So, takaful products should be designed keeping in view the dynamics of the particular country or region to ensure success, he said.

Nevertheless, he noted that takaful is a neglected area of the Islamic finance industry with a mere 2% contribution. The Islamic insurance sector is in dire need of innovative products with which to increase market penetration.

Alongside innovative product development, the distribution mechanism should also be addressed by focusing on outreach through bancatakaful and microtakaful, etc, he said. Moreover, retakaful products should be developed to strengthen the takaful industry in global financial markets. M

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