While the large majority (70%) of people polled in a survey on Islamic insurance said that they would buy takaful products, almost half said that they were not offered that option, according to a white paper released by Islamic Insurance Association of London (IIAL).
The survey was conducted between September and October and drew input from 500 respondents mainly risk managers, brokers and insurers across the major takaful markets. The bulk of responses were from Malaysia, Pakistan, the UAE and Indonesia.
In light of the findings, the Association has thus issued calls for brokers to better meet their Islamic clients’ needs by offering Shariah-compliant solutions.
The call was made as the IIAL held its annual conference in Bahrain recently at which it launched the white paper which explores the current demand for Islamic insurance solutions with findings from the survey of the potential buyers of Islamic insurance and those within the industry.
The global survey found:
- Seven out of 10 of those questioned said they would buy Islamic Insurance products if they were available for their risks.
- There is a clear demand for commercial, specialty and reinsurance products and a desire for healthcare cover at a time when many nations are addressing the issue of funding medical and long-term care for a growing and ever more affluent population.
- Just over one third of those who responded said they buy Islamic insurance creating a significant market for the sector.
- Almost half of those questioned saying that they felt they were not offered the option by their brokers when it comes to placement or renewal discussions.
- There is a strong belief that the Islamic cover is not available, despite efforts by the London and international markets to provide ever larger levels of capacity.
While the fact that 70% of those questioned say they would prefer to buy an Islamic insurance product, the results of the survey are clear on the fact that the industry has to do more to communicate the availability of the capacity and its ability to match the price of conventional covers, said IIAL.
In the current economic climate, price remains a significant attraction but it can be countered by the fact that there is a willingness to buy Islamic cover if it is available and the cost is not prohibitive.
The association undertook the survey with the aim of examining just what the market needs to do to become relevant to the Islamic clients of today and in doing so deliver the right products in the way those clients would like them to be delivered.
Misconception that takaful is not available in market
IIAL Chairman Max Taylor told the conference that there was now a real need for Islamic insurance markets to work together to tackle the misconception that the cover was not currently available.
He added that global standards would not only create a level playing field but also provide clarity for the buyers, and with greater understanding and confidence in the products would come an increased appetite for Islamic insurance products.
Commenting on the white paper, Mr Taylor said: “What is clear from the research is that the market needs to co-operate across all disciplines to drive the supply of Islamic capacity and a wider product range if we are to meet the needs of the Islamic business community and establish the Shariah-compliant products as part and parcel of the industry’s risk management and mitigation tool kit.”