Takaful Insurance Market Overview
Takaful Insurance Market Size was estimated at 34.75 (USD Billion) in 2022. The Takaful Insurance Market Industry is expected to grow from 38.02 (USD Billion) in 2023 to 85.38 (USD Billion) by 2032. The Takaful Insurance Market CAGR (growth rate) is expected to be around 9.41% during the forecast period (2024 - 2032).
Key Takaful Insurance Market Trends Highlighted
The Takaful insurance market continues to exhibit promising growth prospects, fueled by various market drivers. Key among them is the rising demand for Shariah-compliant financial products in Muslim-majority countries. The growing awareness of the benefits of Takaful, such as its ethical principles and risk-sharing nature, is also driving market expansion.
Opportunities abound for market players to capitalize on the untapped potential in emerging markets. Governments in these regions are actively promoting Takaful as a means of financial inclusion and economic development. Furthermore, advancements in technology, such as the adoption of digital platforms and mobile applications, are enhancing accessibility and convenience for customers, further boosting market growth.
Recent market trends indicate a shift towards innovative product offerings. Insurers are introducing specialized Takaful policies tailored to specific customer segments, such as health, education, and microfinance. The emphasis on customer-centricity is also evident, with insurers focusing on providing personalized solutions that cater to the unique needs of Takaful policyholders.
Figure 1: Takaful Insurance Market, 2018 - 2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Takaful Insurance Market Drivers
Growing Muslim Population
One of the key drivers of the Takaful Insurance Market Industry is the rapidly expanding Muslim population across the globe. This is because the worldwide percentage of Muslims is likely to necessitate increased financial literacy, exposing them to the Islamic insurance Takaful, the rising need for Islamic insurance products and services. The growth of the Takaful Insurance Market Industry is therefore projected to be spurred by the population of Muslim people in the world, which is also rising.
Rising Awareness of Takaful Insurance
There is an increasing awareness of Takaful insurance across the globe. The growing awareness can be attributed to the effort of the Takaful insurance service providers in promoting the products and services. Additionally, better access to information from the Internet has increased awareness. As the number of people who have understood Takaful continues to increase, the demand for the products is expected to go up.
Government Support for Takaful Insurance
The Importance of Well-Developed Institutions in the Takaful Insurance Market Industry The need of the governments of the Gulf countries across the globe like UAE in order to reduce the volatility of the oil market, combined with the events associated with the September 11, 2001 terror attacks in the US, have forced these governments to look for ways of reducing the impact of such events on them. The protection of investments and economic development is of great relevance.
However, it is possible that efforts in this direction have not been very successful due to the reluctance to use the numerous alternatives that the Takaful market has offered. It can be concluded that, with effective government efforts, the Takaful Insurance Market Industry will grow even faster.
Takaful Insurance Market Segment Insights
Takaful Insurance Market Coverage Type Insights
Market Overview and Segment Insights Types of Coverage Segments. The market can be segmented by coverage types into Family Takaful, General Takaful, Health Takaful, Golf Takaful, Investment-Linked Takaful, and Savings Takaful, among which Family Takaful is the most significant segment and occupies the highest share of the market. The trend is expected to be maintained throughout the forecast period and can be explained by the growing awareness about the pivotal importance of having financial protection for families and the insatiable demand for the most principles-driven insurance product.
General Takaful is another substantial segment boosted by the demand for the most principles-driven Insurance solutions by businesses and private clients. Though the growth is not likely to be explosive, the pace is likely to be steady as more businesses turn to compliance with Sharia law and the insurance industry continues to expand in emerging markets. Health Takaful is also gaining pace as more private clients who turn to Shariah compliance choose health insurance policies. The segment is expected to grow rapidly due to the upsurge of chronic diseases and healthcare costs.
The characteristics of Investment-Linked Takaful are that the segment yields an opportunity to get insurance and investment products all at once. The segment is expected to grow at a moderate pace, given the demand for more Shariah-compliance options to invest in. Finally, savings Takaful is the most conservative long-term saving and investment product, and it is expected to stay significant as more people choose another mode of investment that combines financial security and spiritual peace. Thus, the Takaful Insurance Market as a whole shows substantial growth and there is no doubt that the boom is likely to continue on the grounds of the upsurging demand for Shariah-compliant investment and insurance products and the growing awareness of the importance of financial protection and the expansion of the insurance market in the emerging countries.
Figure 2: Takaful Insurance Market, By Coverage Type, 2023 & 2032 (USD billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Takaful Insurance Market Distribution Channel Insights
Distribution Channel Segment Insights In the Takaful Insurance Market, the distribution channel segment is a key factor. First, it contains agency distribution, which dominates the larger market share of around 45% of the revenue by 2023. This is because they are helpful in providing personalized advice and maintaining better customer relationships. Second, the channel includes bancassurance, a partnership between banks and insurance companies 23. In this case, banks offer Takaful products to their broad customer base and are responsible for 32% of the market share.
Third, the brokers involve independent parties with 15% of the market share, which are intermediaries for the transactions between insurers and policyholders. Direct sales consist of 5% of the market and take place between the insurers and customers. Additionally, emerging online sales have a 3% share of the market's growth because of better technology services and the availability of the Internet.
Takaful Insurance Market Purpose Insights
The Takaful Insurance Market segmentation by Purpose offers insights into the specific reasons why individuals and businesses opt for Takaful insurance products. Key segments include Education, Hajj and Umrah, Investment, Medical Expenses, Retirement, and Savings. Education: Takaful plans tailored towards educational expenses are gaining traction, driven by the rising cost of education and the need to secure children's future. The market size for Takaful education plans is estimated to reach $12.34 billion by 2024, growing at a CAGR of 9.5%.
Hajj and Umrah: Takaful plans designed specifically for pilgrimage to Mecca are highly popular among Muslim populations. The market for Hajj and Umrah Takaful is projected to reach $6.78 billion by 2024, expanding at a CAGR of 8.7%. Investment: Investment-linked Takaful plans offer a combination of protection and investment opportunities, appealing to individuals seeking long-term financial growth. The market for Takaful investment plans is expected to grow at a CAGR of 10.2%, reaching $18.56 billion by 2024. Medical Expenses: Takaful plans covering medical expenses provide financial protection against healthcare costs.
The market for Takaful medical plans is projected to reach $16.25 billion by 2024, driven by increasing healthcare expenses and a growing awareness of health insurance. Retirement: Takaful retirement plans offer a structured and Shariah-compliant approach to saving for the future. The market for Takaful retirement plans is anticipated to grow at a CAGR of 9.9%, reaching $14.67 billion by 2024. Savings: Takaful savings plans provide a safe and ethical way to accumulate wealth. The market for Takaful savings plans is expected to reach $19.38 billion by 2024, expanding at a CAGR of 10.1%.
Takaful Insurance Market Customer Type Insights
The customer type segment of the Takaful Insurance Market can be broadly categorized into corporates, individuals, microfinance institutions, and small and medium-sized enterprises (SMEs). Among these segments, corporates are expected to account for a significant share of the market in the coming years due to the increasing demand for risk management solutions and the growing awareness of takaful products. The Takaful Insurance Market for corporates is projected to reach a valuation of USD 18.08 billion by 2024, exhibiting a CAGR of 9.6% during the forecast period.
On the other hand, the individual segment is also anticipated to witness substantial growth, owing to the rising disposable income and the increasing demand for personal financial protection. The Takaful Insurance Market for individuals is estimated to reach USD 12.72 billion by 2024, registering a CAGR of 8.5% during the forecast period.
Takaful Insurance Market Product Type Insights
The Takaful Insurance Market is segmented by Product Type into Contribution-Based Takaful, Share-Based Takaful, and Window-Based Takaful. Among these segments, the Contribution-Based Takaful segment is expected to hold the largest market share in 2024, accounting for around 60% of the Takaful Insurance Market revenue. This dominance is attributed to the increasing popularity of this type of Takaful insurance, which offers a transparent and equitable distribution of profits and losses among policyholders. Share-Based Takaful is projected to witness significant growth during the forecast period, owing to its ability to provide higher returns on investments.
Window-Based Takaful, on the other hand, is expected to gain traction in emerging markets due to its simplicity and ease of understanding.
Takaful Insurance Market Regional Insights
The regional segmentation of the Takaful Insurance Market offers valuable insights into the diverse market dynamics across different regions. North America holds a significant market share, driven by increasing awareness and demand for ethical and Sharia-compliant insurance solutions. Europe follows closely, with growing adoption in countries such as the UK and France. The APAC region is projected to witness substantial market growth, fueled by rising disposable income and a growing Muslim population in countries like Indonesia and Malaysia.
South America and MEA are emerging markets with high potential for Takaful insurance, as governments and insurers focus on expanding access to financial services that align with Islamic principles.
Figure 3: Takaful Insurance Market, By Regional, 2023 & 2032 (USD billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Takaful Insurance Market Key Players And Competitive Insights
In the article "Major Players in Takaful Insurance Market," each of the significant participants in this business focuses on the fact that they are expanding their presence in the markets. For instance, "leading Takaful Insurance Market players are focusing on investing in research development to develop new products that meet the changing customer needs". Notably, the Takaful Insurance Market industry is highly competitive, as there are numerous reputable and well-established companies. One of the major competitors is characterized by "its strong brand and extensive network". This company provides a vast number of different types of Takaful products and services, known as family, health, or general Takaful. The organization has well-established branches in various markets and, consequently, is actively expanding. Another major competitor is recognized to have a "strong performance of new product launches". This business is famous for its wide range of innovative products and brands. It is also known for providing clients with custom-made products that work the best. More to the point, this company is highly recognized for its commitment to providing excellent service and satisfaction to its customers.
Key Companies in the Takaful Insurance Market Include
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Takaful Emarat Insurance Company
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Hong Leong Assurance
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Ethica Takaful Insurance
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SALAMA Cooperative Insurance Company
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Tokio Marine Life Insurance Malaysia
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Solidarity Takaful Sudan
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AlRajhi Takaful
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Allianz Malaysia Berhad
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Zurich Takaful Malaysia Berhad
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Oman Insurance Company
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Al Hilal Takaful
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AXA Affin General Takaful
Takaful Insurance Industry Developments
The Takaful insurance market is projected to grow from USD 38.02 billion in 2023 to USD 85.38 billion by 2032, exhibiting a CAGR of 9.41% during the forecast period. This growth can be attributed to factors such as rising awareness about Takaful insurance, increasing demand for Sharia-compliant financial products, and growing disposable income in Muslim-majority countries.
Recent developments in the Takaful insurance market include the launch of new products and services by leading insurance companies. For instance, in 2023, Salaam Takaful launched a new health insurance product that provides coverage for a wide range of medical expenses. Additionally, there have been several partnerships and collaborations between Takaful insurance companies and other financial institutions to offer bundled products and services to customers.
Overall, the Takaful insurance market is poised for significant growth in the coming years, driven by increasing demand for Shariah-compliant financial products and rising awareness about Takaful insurance.
Takaful Insurance Market Segmentation Insights
Takaful Insurance Market Coverage Type Outlook
- Family Takaful
- General Takaful
- Health Takaful
- Investment-Linked Takaful
- Savings Takaful
Takaful Insurance Market Distribution Channel Outlook
- Agency
- Bancassurance
- Brokers
- Direct Sales
- Online Platforms
Takaful Insurance Market Purpose Outlook
- Education
- Hajj and Umrah
- Investment
- Medical Expenses
- Retirement
- Savings
Takaful Insurance Market Customer Type Outlook
- Corporates
- Individuals
- Microfinance Institutions
- Small and Medium-Sized Enterprises
Takaful Insurance Market Product Type Outlook
- Contribution-Based Takaful
- Share-Based Takaful
- Window-Based Takaful
Takaful Insurance Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
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Report Attribute/Metric
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Details
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Market Size 2022
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34.75 (USD Billion)
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Market Size 2023
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38.02 (USD Billion)
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Market Size 2032
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85.38 (USD Billion)
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Compound Annual Growth Rate (CAGR)
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9.41% (2024 - 2032)
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Report Coverage
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Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
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Base Year
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2023
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Market Forecast Period
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2024 - 2032
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Historical Data
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2019 - 2023
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Market Forecast Units
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USD Billion
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Key Companies Profiled
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Takaful Emarat Insurance Company, Hong Leong Assurance, Ethica Takaful Insurance, SALAMA Cooperative Insurance Company, Tokio Marine Life Insurance Malaysia, Solidarity Takaful Sudan, AlRajhi Takaful, Allianz Malaysia Berhad, Zurich Takaful Malaysia Berhad, Oman Insurance Company, Al Hilal Takaful, AXA Affin General Takaful
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Segments Covered
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Coverage Type, Distribution Channel, Purpose, Customer Type, Product Type, Regional
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Key Market Opportunities
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Rising Muslim Population.Expanding Middle Class in Muslim Majority Countries.Penetration of Digital Technologies in Islamic Finance.ShariahCompliance Benefits for Investors.Increasing Awareness of Takaful.
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Key Market Dynamics
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Regulatory Support and Government Initiatives.Growing Awareness and Demand.Innovation and Technology Advancements.Expansion of Distribution Channels.Collaboration and Partnerships.
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Countries Covered
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North America, Europe, APAC, South America, MEA
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Frequently Asked Questions (FAQ) :
The Takaful insurance market is expected to reach USD 38.02 billion in 2023.
The Takaful insurance market is expected to grow at a CAGR of 9.41% from 2024 to 2032.
The Middle East and Africa region is expected to have the largest share of the Takaful insurance market in 2023.
The key growth drivers of the Takaful insurance market include the increasing demand for Shariah-compliant financial products, the growing population of Muslims worldwide, and the rising awareness of Takaful insurance.
The key competitors in the Takaful insurance market include Salaam Takaful, Abu Dhabi National Takaful Company, and Dubai Islamic Insurance and Retakaful Company.
The key challenges facing the Takaful insurance market include the lack of awareness about Takaful insurance, the limited product offerings, and the regulatory challenges.
The key opportunities for the Takaful insurance market include the increasing demand for Shariah-compliant financial products, the growing population of Muslims worldwide, and the rising awareness of Takaful insurance.
The Takaful insurance market is expected to reach USD 85.38 billion in 2032.
The key trends in the Takaful insurance market include the increasing adoption of digital technologies, the development of new products and services, and the growing focus on customer service.
Takaful insurance is used to cover a wide range of risks, including life insurance, health insurance, property insurance, and travel insurance.
