Takaful growth prospects diverge as countries choose different models: S&P
25 Sep 2012 04:26 GMT
 

Takaful has developed most in the Gulf Cooperation Council (GCC) region and southeast Asia, but individual countries in each region have taken dif (more)

Takaful has developed most in the Gulf Cooperation Council (GCC) region and southeast Asia, but individual countries in each region have taken different routes to develop the sector. Thus, the business lines that predominate in these two regions are distinctly different, as are the sources of growth and the investment models.

We remain concerned by widespread use of high-risk investment strategies by takaful providers, and by the sector's lack of global standards in areas such as accounting standards and Sharia compliance. In our view, it is unclear how many of the companies involved will sustain their profitability over the longer term, particularly in the GCC region. However, developments in Malaysia--the largest takaful market in southeast Asia--appear much more healthy and sustainable. They are supported by more-sophisticated regulatory oversight and the stronger investment profile of the industry.

Media Contact:Baiju Francis/Dhanya Isaac Weber Shandwick MENATel: +971 (0) 4 321 0007; e-mail: baiju.francis@ws-mena.com/ dhanya.isaac@ws-mena.com

Raeda KassabStandard & Poor's Tel: +971 4 372 7171; e-mail: raeda_kassab@standardandpoors.com

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