Insurance in the Muslim World

With the release of the Swiss Re Sigma report on world insurance (3/2019) we can analyze the statistics of the Muslim world. By Muslim world, we mean those countries where Muslims are the majority of the population. This can be interpreted as a proxy for demand for Takaful as well as a way to gain insights on insurance purchasing behavior in the Muslim world.

The ranking of the top 10 Muslim countries by total premiums in 2018 in USD is as follows:

Out of these countries, only Morocco does not have Takaful in any form. Though new regulations are being finalized which will enable Takaful. In Saudi Arabia, there are cooperative regulations with some insurers considering themselves Takaful and others more broadly cooperative insurers. In Iran, the insurers follow Shi’a law.

Whereas total insurance premiums combines both personal lines as well as commercial business, comparing life premiums on its own gives a better proxy for awareness and understanding of insurance. Of course, this is not a perfect indicator as there can be wide variations of product mixes, ranging from mortgage reducing term insurance tying up with bank loans to medical insurance, savings products and many others. The ranking of the top 5 Muslim countries by life premiums in 2018 in USD is as follows:

Here, there is a significant gap between Indonesia and Malaysia, and the Middle East (as well as other Asian Muslim countries). By looking at life insurance premiums per capita, the effect of the size of the population is taken into account, with both Indonesia and Turkey no longer being in the top 5. This points to the potential of these two countries in particular.

Non-life, on the other hand, is affected by commercial lines, with the large commercial contracts helping the results in the Middle East:

In terms of total premium growth in 2018 several countries experienced difficult conditions in 2018. The following table is also affected by changes in exchange rate:

Top 5 Muslim Countries by Total premium % growth in 2018:

Finally, looking at premiums as a percentage of GDP:

Top 5 Muslim Countries by total premium as a percentage of GDP:

Practice Areas: