The demand for takaful insurance is increasing in Oman with industry players attaining a robust growth despite an economic slowdown.
The Times of Oman reported that players achieved a 64% growth in gross direct premium at 39mn Omani Rial or US$101 million in 2015.
Takaful insurance firms have been succeeding mainly due to the players’ ability to gain people’s trust, offer affordable and competitive premium and quality service, the report added.
Based on Sharia law, takaful is a type of Islamic insurance, where members contribute funds into a pooling system in order to ensure each other against loss or damage.
Takaful firms should adhere to religious guidelines, including bans on interest and pure monetary speculation and prohibitions on alcohol and gambling investments.
According to the The Times of Oman, the Sultanate’s two takaful insurance firms – Al Madina Takaful and Takaful Oman Insurance– are creating public awareness about the importance of Sharia-compliance insurance schemes.
The takaful sector’s growth in 2015 constituted around 9% of the Oman insurance industry’s US$1.14bn direct premium income and 5% of the total paid claims, the report said.
The annual average growth of 12% in the past five years also showed the growing popularity of both conventional insurance products and takaful insurance schemes in the Sultanate, where there are 36 insurance brokerage firms and 22 insurers, The Times of Oman also reported.