Public awareness of the features of Islamic "Takaful" insurance -- which does not permit the collection of interest, but is rather based on participation in the growth of production and revenue -- should be raised, according to a new survey.
"There is a need to raise awareness of Takaful and what it can offer, and of the differences from conventional insurance," according to the survey published by the General Council for Islamic Banks and Financial Institutions (CIBAFI) on Thursday.
The CIBAFI Global Takaful Survey 2018 reflected the perspectives of the heads of 55 Takaful companies from 24 countries worldwide.
It said there may be government support to raise awareness of the Islamic insurance, but in many cases this will fall to the industry itself, while working with religious groups.
"Takaful companies are optimistic about growth, and expect it to be slightly stronger than for insurance as a whole. It is the Takaful firms in newer markets who are most optimistic about growth, but they face in a more acute form the problems reported by many Takaful companies across the world," the survey said.
It added that the industry has a continuing struggle to establish its position in a market largely dominated by conventional insurers, and often in areas where overall insurance penetration is relatively weak.
The survey said Takaful companies tend to be locally focused and seek organic growth in their domestic markets rather than mergers and acquisitions or cross-border activity.
It added there is a risk that Takaful firms will be left behind by technical developments in the conventional business.
The survey also shows that Takaful companies recruit mostly in local markets, saying: "It is therefore likely that regulators or other national bodies will need to take action to support training."
