Insurance
The market characteristics of the Arab region are quite different from other regions. The main differences are in terms of the attitude to risk and lack of insurance awareness. The Middle East is a mixture of some rich and some poorer economies. Insurance density and penetration in some of these countries show the low expenditure in life insurance.
Nevertheless many of the classic parameters of old are changing, such as the extended family system. The pace of change has increased due to urbanisation and industrialisation and the recent phenomenon of liberalisation and globalisation. Moreover, populations of many countries are skewed towards younger age groups, which has put greater pressure on limited resources and employment.
Insurance, especially life insurance, is an essential part of the social protection needed for any society. It has its rightful place in Islam but years of misunderstanding and misconception have created mental blocks against insurance in the Muslim culture. Takaful or Co-operative Insurance is a way forward towards the breakdown and removal of such mental blocks. This type of insurance has a great deal to offer in Muslim countries. It can genuinely enlarge the insurance market in areas where traditional insurance has seen limited growth.
