Growth of Islamic insurance sector rebounding

Growth of takaful business is rebounding, fuelled by improved economic conditions across its core markets and increased underwriting needs from the broader Islamic banking sector, a study by Ernst & Young showed. In previous years, inefficiency and intense competition have limited the sector's expansion, and growth rates slowed around the turn of the decade. But driven largely by Saudi Arabia and Malaysia, the sector is expected to grow 14.4 percent this year. Key drivers of the recent upward trend include improving economic conditions and a revitalised Islamic banking industry generating assets for takaful operators to underwrite. The sector will also benefit from an upswing in banking penetration rates across its core markets.