The global takaful insurance market is projected to reach $126.8 billion by 2032, growing at a CAGR of 15.2% from 2023 to 2032.
According to a report from Allied Market Research seen by Nairametrics, the global takaful insurance market was valued at $31.7 billion in 2022.
Takaful insurance is quickly expanding as a result of increasing awareness of Islamic finance principles, growing demand for ethical and sharia-compliant financial solutions, expansion into new markets with significant Muslim populations, and diversification of takaful product offerings.
Key drivers
According to the report, the takaful insurance market is influenced by several major drivers, restraints, and opportunities.
It noted that the insurance market is rapidly developing with Growth in demand for takaful insurance across Muslim-majority countries.
- “Furthermore, the market is being driven by the distribution of Investment profits among both participants, by encouraging a spirit of justice and teamwork, bringing people and companies into the takaful insurance market and fostering its expansion.
- However, the takaful insurance market faces growth challenges due to lower consumer awareness, as many potential participants are unaware of its benefits and Sharia-compliant options.
- On the contrary, for the takaful insurance business, the untapped market potential provides a large opportunity since it permits expansion and growth in niches and geographic areas where awareness and adoption are still in their infancy,” the report noted.
General segment
The report noted that based on type, the general takaful segment held the highest market share in 2022, accounting for around three-fourths of the global takaful insurance market revenue.
- “This can be attributed to the fact that it meets a variety of demands, such as insurance for houses, businesses, vehicles, and other valuable assets, and general takaful appeals to a wider consumer base.
- It can take a bigger portion of the market thanks to its vast breadth. However, the family takaful segment is projected to manifest the fastest CAGR of 18.2% from 2023 to 2032, this is attributed to the fact that it takes care of urgent necessities like life insurance and family financial stability, making it a top priority for anyone looking to safeguard those they cherish,” it noted.
Distribution channel
According to the report, based on the distribution channel, the agent and brokers segment held the highest market share in 2022, accounting for more than half of the global takaful insurance market revenue, and is estimated to maintain its leadership status throughout the forecast period.
- “This is attributed to the fact that they ease the selling of takaful policies and offer individualized guidance, efficiently reaching a large consumer base and developing confidence via their knowledge and service.
- However, the direct response segment is projected to manifest the fastest CAGR of 21.6% from 2023 to 2032, this is due to their affordability and convenience, which let customers buy insurance directly online or over the phone, without intermediaries, and facilitate quick market penetration,” the report said.
Commercial segment
Based on application, the report noted that the commercial segment held the highest market share in 2022, accounting for nearly three-fifths of the global takaful insurance market revenue, and is estimated to maintain its leadership status throughout the forecast period.
- “This is due to their varied risk management requirements, regulatory constraints, and the size of their activities, they represent a sizable group that demands complete takaful coverage.
- However, the personal segment is projected to manifest the fastest CAGR of 17.2% from 2023 to 2032, this is attributed to the fact that people’s needs for insurance are more urgent and relatable, particularly those for personal and family security,” the report noted.
