Consumer Protection at the Crux of Takaful Islamic Insurance

The global population of 2 billion Muslims remains largely unprotected against risk. There is a growing need to design insurance products that meet the needs of these excluded adults to provide better risk protection. Takaful is one possible solution for people who would not otherwise use conventional insurance products. The greatest potential for Takaful may be in countries with predominantly Muslim populations. However, these countries also tend to be ones with some of the lowest levels of financial literacy. This situation creates a significant challenge for supervisors. With the help of an enabling regulatory environment, Takaful can deliver on the promise of necessary products at the right price.