Emerging market economies saw the volume of non-life insurance premiums increase by 11.6 percent last year, while the Islamic insurance sector grew by 25 percent, according to new research from Swiss Re.

The findings from the Zurich-based reinsurer were contained in its latest “sigma” study, which examined the market in 59 nations in areas of South and East Asia, Eastern Europe, the Middle East, Latin America, the Caribbean and South Africa.

Swiss Re said that in real terms non-life premium volume in 2007 for emerging markets amounted to $199 billion.

Among the growth areas, there were increases of 13 percent for South and East Asia, 12 percent for Eastern Europe and the Middle East, and 9.6 percent for Latin America and the Caribbean.

Non-life insurance in the countries studied benefited “from the strong economic environment [in 2007] and the introduction of new compulsory lines in the Middle East,” said a statement from report co-author Daniel Staib. Vehicle and property business insurance dominated, he reported.

According to Mr. Staib, from 2008 to 2013 average annual growth of insurance sales in emerging markets is expected to run about 3-to-8 percent, but long-term prospects are positive.

Islamic takaful insurance, which separates shareholder funds from policyholder funds, between 2004 and 2007 had average annual growth estimated at 25 percent when adjusted for inflation, the report said.

Last year, the study found takaful premiums written were $1.7 billion, and it was projected that this figure could hit $7 billion by 2015.

The takaful markets analyzed in the report were Bahrain, Indonesia, United Arab Emirates, Malaysia and Saudi Arabia. The last two were said to have the most growth potential.

“Various Islamic insurance models that comply with the shariah, the body of Islamic religious law, have been adopted in Muslim countries,” the report noted. “Takaful, the focus of the 'sigma' study, is the most accepted model.”

Trends identified by the study included the following:

o A decision by some regulators to push for the introduction of more stringent capital requirements.

o The expansion of “microinsurance,” which extends coverage to low-income individuals.

o A continued growth in importance of “bancassurance” as a distribution channel.

Special Reports /

Swiss Re Spotlights P-C Soaring Growth In Takaful

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