Takaful and Islamic financial services sector has witnessed remarkable growth over the past years. According to the latest report issued by the Islamic Financial Services Board (IFSB), the value of contributions to Takaful sector reached $ 26.1 billion at the end of 2017 compared to 18.65 in 2012.Further, according to a study released by "Business Wire" in 2019, contributions are expected to exceed the $ 40 billion during the next four years.

The GCC region maintains the leading position as the largest global Takaful insurance market, with contributions of about $ 11.71 billion, which represents 45% of total global contributions

In parallel to these developments, Takaful insurance sector in the UAE has witnessed rapid growth thanks to the vision of the wise leadership to make the UAE market a global center for the Islamic economy

The Insurance Authority pays special attention to Takaful insurance sector in all aspects, given its vital role in the protection of persons and property against risks. In view of that, the UAE is first Arab country to establish a comprehensive regulatory legislation for Takaful insurance 

The contributions of Takaful insurance reached 10.4 % of total written premiums in the insurance market of the state, which is equivalent to AED 4.6 billion in 2019, by a growth rate of 34.5% compared to 2015

Moreover, the Insurance Authority is working to enhance the sustainability of Takaful insurance growth through the development of legislation and adopting an integrated financial regulations system financial specially for Takaful insurance companies. Within this system, capital requirements, solvency margin, private investment, record - keeping and management will be regulated

At the level of innovation, the Insurance Authority has worked on the establishment of innovation centers in all companies working in the insurance sector. As well as, promoting the application of the regulatory rules of experimental environment technology “Sandboxes”. Additionally, to the new Digital Supervisory Platform established by the Insurance Authority is a qualitative shift to move to the next generation of insurance supervision and control,

The Insurance Authority also focuses on qualifying and training human resources working in the sector, by launching the IA Academy for Professional Training, in cooperation with some international strategic partners. The initiatives aim at training (3000) professionals and workers in the sector

The Insurance Authority is working to find development opportunities to meet the challenges that face Takaful insurance sector like other financial sectors, including the COVID-19 crisis. The indicators show that Takaful insurance companies in the state settled claims related to the Coronavirus, with a total amount of about (AED 46 million). The Authority is also working on the development of market practices and strengthen corporate governance, risk management and disclosure. As well as, strengthening the role of the Internal Shariah Supervision Committee of companies and establishing strategic plans and innovative business models that can compete globally

Based on previous data and indicators, it is expected that Takaful insurance sector and the UAE insurance market in the UAE will witness progress in global competitiveness indicators in the coming years

Ebrahim Obaid Al Zaabi

 Director General of Insurance Authority