By Fajr Al-Hajeri
(with photos) KUWAIT, March 24 (KUNA) -- Takaful insurance is forecast to post noticeable growth at the international level as part of overall development witnessed in sector of Islamic banking following eruption of the global debts crisis, according to an eminent Kuwaiti academic.
However, at the local level, this sector might "face a tsunami," unless the 2005 bill, issued by the National Assembly, was effected, and current status of the takaful insurance sector was altered, warned Dr. Mahmoud Behbehani, professor of insurance and actuarial science at Kuwait University, in an interview with KUNA.
Noting that the takaful (Islamic) insurance required a large market, unlike the one of Kuwait, Dr. Behbehani indicated at high demand for establishing new companies, due to mounting volume of installment payments from KD 90 million dinar per year to KD 180 million py over the past years.
Number of takaful and traditional insurance companies has risen from 15 to 28, and studies have shown that payments for such a company must be in the range of KD five million, so that it could continue and prosper.
He indicated at two approaches to tackle the sector; halting issuance of licenses to new companies to ensure success of the existing ones, or allowing launch of new ones for sake of boosting competition.
At the global level, companies have either established branches or are planning to set up subsidiaries, particularly in nations with large Muslim communities. Moreover, some conglomerates showed desire to acquire takaful insurance companies.
Dr. Behbehani affirmed that the Islamic form of insurance could be much more useful and beneficial for the insured, in case the takaful system is literally applied, where the client would turn into a share-holder.
This kind of insurance, which abides by the Islamic shariaa, is primarily intended to secure continuing income for the family, payment of debts of the deceased. The insurance is also intended for aid in cases of retirement, incapability of work and sickness, Dr. Behbehani said, indicating that the interest-based traditional system is replaced with the (Islamic) profit-sharing method. (end) fh.rda.rk KUNA 241131 Mar 12NNNN