Insurance only began to look like a proper industry in Saudi Arabia in May 2004. That was when regulation and a system of controls finally drove the cowboys out of town. Prior to that, setting up and operating an insurance company was a matter of opening an office and little more. Some did and there is one instance of a company disappearing overnight and leaving thousands of people without motor insurance.
While still young, the industry has quickly learned the benefits of tight regulation and transparency. The effect has been to reduce the number of smaller, unregistered companies while increasing the size of the 40 or so still operating today.
It’s an area that has already demonstrated tremendous growth and attracted the interest of conventional insurers from around the world. Not least among these is Prudential Insurance in the UK, which operates a Shari’ah compliant life insurance (takaful) section in the UK and in Saudi Arabia through a cooperative agreement with Bank al-Jazira.
The constitution of takaful companies prevents them from offering insurance to breweries, nightclubs and other areas where the activities are prevented by Shari’ah law. Nevertheless, it still can operate in a substantial range of areas within the Shari’ah system.
The energetic oil-driven economies of the Gulf region have shown sustained industrial and commercial development. This has provided fertile areas of growth for insurance such as marine, aviation, fire and engineering risks. And at the individual client level, health, home and buildings, motor and general accident insurance.

   Email This Post      Print This Post       | Next