Takaful, a form of insurance based on the principles of mutual protection, co-operative risk and the sharing of surplus capital, has its origins in Islamic law, but it’s potentially available to anyone.

The word takaful means ‘mutual obligation’ or ‘mutual guarantee’ and it has been around in some form for 1,400 years. Modern takaful insurance products began to emerge in Sudan in 1979, in response to a growing demand for alternatives to conventional insurance, which is considered unlawful due to its in-built uncertainty and the requirement for charging interest.

In 1985, the Grand Counsel of Islamic Scholars gave takaful insurance its seal of approval, declaring it the ‘correct alternative’ to conventional insurance and fully compliant with sharia (Islamic) law.

Since then, takaful has become increasingly popular in the Middle East, where it is now the region’s main form of insurance. However, there’s an important, untapped market in Asia Pacific, which is home to 62 per cent of the world’s Muslims.

According to Allied Market Research, takaful in Asia is expected to witness significant growth owing to ‘rising digitisation in various countries and adoption of advanced technology by takaful insurance service providers to increase sales’.

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