The UAE Insurance Authority is studying the system of determining wakala fees of takaful companies in accounting policies to be applied and the forms required for the preparation of reports and financial statements, according to Mr Ebrahim Obaid Al Zaabi.
Delivering the keynote address at the 13th World Takaful Conference in Dubai yesterday, he said the Authority is also planning regulations on the organisation of life insurance and family takaful, which will be the first of its kind in the region.
Takaful contributions accounted for about 10% of the gross written premiums in the UAE market in 2017, compared to 9.4 %, with a value of AED3.7 billion (US$1 billion) in 2016. The sector contributes almost 6% of the total investments of the insurance sector in 2017, compared to 5.8%, with a value of AED3 billion in 2016, he said.
The contribution of the takaful companies in the region amounted to about AED11 billion, accounting for almost 50% of the global contributions in 2016, he said.
“The development of the legislative and legal basis for the insurance sector has contributed to strengthening the region's leadership role in creating integration,” he added.
Mr Abdulla Mohammed Al Awar, CEO of Dubai Islamic Economy Development Centre (DIEDC), in his address titled “Opportunities for the retakaful industry in the Middle East, Africa and South Asia region”, said: “The opportunities made available by the takaful sector pave the way for a new phase of socioeconomic prosperity. The world today needs fast-growing and low-risk sectors. Individuals and corporations alike require a sense of confidence to invest or pump liquidity into the market. Like other Islamic finance instruments, takaful provides an alternative to the fast-growth model that was prevalent in the conventional financial sector before 2008, but without the outcomes that led to the subsequent economic crisis.”
Mr Salmaan Jaffery, Chief Business Development Officer, Dubai International Financial Centre Authority, said: “With Islamic finance assets expected to grow to $3.8 trillion by 2022, there is a massive opportunity for Islamic finance. This sector remains a key focus area for DIFC in line with Dubai’s vision to be the world’s capital of the Islamic economy. The Centre is home to 108 insurance-related entities including six of the world’s top ten insurance firms.”
The discussions at the conference highlighted the need for more collaboration between various corporations in the takaful sector as well as the importance of innovation and differentiation for these companies to expand in the region.