The sentiment in the takaful market has noticeably changed over
the last 24 months. The focus has shifted from headlines about the
rapid growth of the sector to instead concentrate on concerns about
return on equity and the challenges arising from competition, lack
of scale and access to talent. In the United Arab Emirates recent
regulatory changes are likely to exacerbate these concerns in the
short to medium term. But for the takaful operators who are capable
of adapting there remain significant opportunities.
The Status of the Market
In its Annual Report (i) the UAE Insurance Authority reports
that the insurance market in the UAE grew by 13.5% to a total
written premium of US$9.128 billion. Regrettably, the report does
not provide separate statistics for the takaful sector. However,
figures published by Ernst & Young(ii) forecast the gross
takaful contributions for 2014 of US$1.314 billion (approximately
14.3% of the total premiums). These statistics illustrate
