Takaful Outpaces Conventional Insurers During 2020–24: QFC

Islamic insurance in Doha outpaced conventional risk cover providers during 2020-24 and the wave of mergers and acquisitions in the Gulf takaful sector presents “significant” opportunities for the Qatari players to expand their market presence and diversify their portfolios, according to a Qatar Financial Centre (QFC) report.

“While gross written premiums (GWP) for conventional insurance declined by 5.2%, takaful GWC (gross written contributions) grew at a CAGR (compound annual growth rate) of 13.5%.

 This growth trajectory underscores an increasing preference for Shariah-compliant insurance products in Qatar,” said a QFC report on Islamic Finance.

Highlighting that Qatar’s takaful sector has demonstrated notable growth and resilience between 2020 and 2024; it said GWC reached $1.9bn by the end of 2024.

“This figure, while modest compared to the conventional insurance sector, highlights the steady presence and gradual expansion of takaful in the Qatari market,” it added.

Growth in the takaful sector has been fuelled by several key factors.

 These include a rising awareness and demand for Shariah-compliant financial products, supportive regulatory frameworks, and the overall economic development in Qatar, according to the report.

The sector has also benefited from increased marketing efforts and the introduction of innovative and tailored takaful products, it added.

The share of takaful’s contribution to total GWP in Qatar nearly doubled from 2020 to 2024, from 6% to 11%, indicating a shifting landscape where takaful is becoming more significant in Qatar’s insurance industry.

“Still, the niche nature of takaful can limit its market penetration compared to conventional insurance. 

Additionally, conventional insurers often have more aggressive marketing strategies and a wider range of products, which further strengthens their market share,” it said.

Highlighting that Qatar’s insurance sector includes 26 firms regulated by both the Qatar Central Bank and QFC Regulatory Authority; it said there are five independent takaful companies among them: Qatar Islamic Insurance Company, Al Khaleej Takaful, Beema, General Takaful Company (part of Qatar General Insurance and Reinsurance Company), and Doha Takaful Company (part of Doha Insurance Group).

Several takaful companies are authorised to operate under the QFCRA, including MedGulf Takaful and Seib Insurance and Reinsurance Company.

The three largest takaful operators are Qatar Islamic Insurance, Beema and Al Khaleej Takaful, together accounting for around 81% of GWC in 2024. Qatar Islamic Insurance is the largest takaful operator in Qatar, contributing 29%.

The takaful business in Qatar encompasses several key lines of business with most prominent are the family/life and health, motor, and property and general accident sectors.

Family and health takaful saw the highest growth among takaful segments, achieving a CAGR of 20% between 2020 and 2024, mostly after mandatory health insurance requirements were introduced in 2022 and 2023.

The segment was contributing 52% of GWC by the end of 2024, compared to 37% in 2020. The implementation of mandatory health insurance in Qatar has helped generate substantial demand for health insurance and takaful products.

The report found the GCC takaful sector has been experiencing a notable trend of consolidation, driven by several key factors.

Finding that the consolidation trend presents a significant opportunity for Qatar to expand its own takaful market; it said by acquiring takaful operators or insurers in other countries, Qatari companies can enhance their market presence and diversify their portfolios.

This can help Qatari takaful operators gain access to new customer bases, leverage economies of scale, and improve their competitive advantage, according to the report.