MALAYSIA SAUDI ARABIA ARE TOP GLOBAL TAKAFUL MARKETS

DUBAI, April 15 (Bernama) -- Saudi Arabia and Malaysia are the top two
Takaful markets worldwide, with contributions totalling US$1.7 billion and
US$797 million respectively in 2007, Ernst & Young's World Takaful Report 2009
has revealed.

It said global Takaful contributions rose to US$3.4 billion in 2007
compared to US$2.5 billion in 2006.

Unveiled at the Annual World Takaful Conference 2009, the report said
Takaful, or syariah-compliant cooperative insurance, had been expanding by
tapping into large Muslim markets globally.

However, it noted that there were still significant untapped markets in
Asia and the Middle East and the North Africa region.

"The Gulf Cooperation Council (GCC), Malaysia and Sudan are the top three
markets for Takaful while the Indian sub-continent, Indonesia, Egypt and Turkey
remain the least penetrated Muslim markets," the report said.

The GCC comprises Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and United
Arab Emirates.

Sameer Abdi, head of Ernst & Young's Islamic Financial Services Group
said: "Takaful markets now span much of the globe but there still exists a
large, expanding and untapped Muslim population on almost every continent.

"We estimate that the global Takaful market could be as high as US$7.7
billion by the end of 2012."

According to Omar Bitar, managing partner at Ernst & Young Middle East's
Advisory Services, the global downturn had affected everyone and Takaful was
not immune.

He said Takaful operators would now need to better manage their costs in a
more challenging market as the risk landscape had changed substantially.

"Investment portfolios, human resource expertise and competition will be
their most pressing business risks over the coming 12 months.

"Operators will also need to reassess their core business, move away from a
reliance on high-risk investment returns, and focus on achieving underwriting
profit," he said.

The report recommended that to counter high-risk investment portfolios,
Takaful operators would need to enhance their portfolio management capabilities
and improve risk-adjusted returns.

To deal with human resource expertise risk, operators were advised to focus
on developing local talent and partnering for quick market entry.
-- BERNAMA