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ABU DHABI – The Central Bank of the United Arab Emirates (CBUAE) has released a comprehensive report on the takaful industry in the UAE, with the aim of growing this key sector and enhancing the country’s position as the world’s leading takaful market.
The report highlights the growing importance of the takaful industry in the local market and its expansion from 2018 to 2021 on various financial indicators.
Total gross premiums written by all takaful companies operating in the UAE amounted to AED 4.35 billion in 2021, representing a growth rate of 0.51% compared to AED 4.32 billion in 2020. These subscriptions accounted for 9.82% of total written premiums for the 2021 insurance industry.
Health takaful activity accounted for the largest share, accounting for 43.6% of total subscriptions in the UAE takaful industry in 2021. This was followed by asset and liability takaful activities at 38.3 percent, and family takaful activities fund accumulation operations at 18.1 percent.
As of the end of 2021, there are 12 takaful companies operating in the UAE, all of which are state-owned companies. However, this figure is likely to decrease in the coming period due to merger and acquisition activities.
The report also revealed that there are 62 domestic and foreign insurers in the UAE insurance industry. The number of written takaful policies increased significantly to 992,106 in 2021 compared to 820,517 in 2020.
In addition, the report also covers several other aspects related to the business in the takaful industry, including sustainable operations, emirates and the outlook for digital transformation. The report highlights that all takaful companies have specific digital transformation strategies.
The report outlines the current practices of takaful insurance companies and their initiatives to improve financial and technical performance, adopt best sustainable development practices, and attract and encourage UAE nationals to work in this important sector.
Furthermore, the report highlights the key strengths of the UAE takaful industry and the significant qualitative and quantitative developments it has witnessed, particularly in terms of regulation.
The report highlights the establishment of the Higher Shariah Authority (the Authority) and the supervision and control of the insurance industry by the Central Bank under Federal Decree No. (25) of 2020. It also discusses the various initiatives of the Authority to develop regulatory oversight by creating a Shariah governance mechanism for takaful insurance companies, establishing a takaful market framework and their operating practices.
In addition, the Authority is developing Shariah standards to increase the confidence and flexibility of the sector and ensure legal and Shariah certainty. The UAE has been a leader in this field since 1979.
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