The Takaful insurance market is expected to grow strongly by 15.1% from 2024 to 2030, according to WhaTech. Growing awareness of Islamic finance, the increasing Muslim population, and a desire for ethical financial products are its driving factors.
While there is a growing awareness, especially among the high Muslim population in Malaysia, it is relatively low compared to its increasing Muslim population. As of 2023, only 40% of Malaysians have adequate takaful or insurance coverage for emergencies, according to Bernama.
The global data on Takaful awareness is somewhat limited. However, when asked on ChatGPT, it gives an approximate of Takaful awareness based on general trends and patterns found in Islamic finance research, reports, and case studies.
ChatGPT’s Reasons for Choice for Takaful Awareness Level
To simplify the understanding of the data below, ChatGPT presents the Takaful awareness levels in a clear pattern. This conclusion is based on its analysis as outlined below:
- Non-Muslim majority countries have low awareness. This is because it is niche and not widely a part of the mainstream financial system.
- Muslim majority in developing countries awareness is on the rise. The awareness is in developing countries like Afghanistan.
- Muslim majority countries with limited financial infrastructure. The awareness is slightly higher.
- MENA, Southeast Asia, and GCC. Has moderate to high level of awareness due to advanced Islamic finance systems.
Level of Takaful Awareness on Top Countries Globally
When asked about its confidence in Takaful awareness data, ChatGPT is confident about it, though limited. Based on available insights and general trends in Islamic finance awareness, here are the top countries with the moderate to the highest level of Takaful awareness, ranked by ChatGPT:
1. Gulf Cooperation Council (GCC) Countries (e.g., UAE, Saudi Arabia, Qatar) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates
Takaful level of awareness in these regions, according to the AI chatbot, is approximately ~85-95%. The reason is said to be from a strong promotion by governments, integration with the financial system, and higher financial literacy in Islamic finance.
With Saudi Arabia being the biggest market in the region, the GCC makes up for more than half of all Takaful issuance worldwide. The gross written premium for insurance in the GCC topped $20 billion in 2024, indicating a consistent yearly increase of almost 20% since 2020. Increased price, economic diversification, and regulatory requirements are the main drivers of this rise.
2. Southeast Asian Countries with Advanced Islamic Finance Industries (e.g., Malaysia, Indonesia)
According to ChatGPT, the awareness of Southeast Asian countries is quite high, approximately from~70-85%. However, according to UNDP, many developing countries, including those with large Muslim populations, the insurance penetration remains low.
Malaysia, however, is generally an exception in the Southeast Asia region. In Malaysia, the insurance penetration rate is at 20% as of July 2024, showing significant growth from 15% in 2015. This has been largely driven by an increase in Family Takaful certificates in that country.
It is much higher than in other SE Asian countries with a Muslim majority population, like Indonesia, with 0.19% of GDP.
That said, while Malaysia still faces some barriers in terms of expanding insurance products to certain segments of its population, it is more advanced in this area than many other Muslim-majority nations, where socio-cultural and religious reasons still hinder broader acceptance of conventional insurance.
3. Middle-Eastern and North African Countries (MENA)
The awareness of Takaful in many of the MENA region is moderate, ~50–70%, supported by Islamic finance institutions and Shariah-compliant banking. Financial literacy plays a key role in awareness levels.
In developing Muslim-majority countries like Afghanistan and parts of Sub-Saharan Africa, awareness is low with gradual improvements. This is due to legal frameworks and growing public interest.
Meanwhile, in emerging markets with Muslim minorities, such as India, the Philippines, and Thailand, awareness is concentrated in Muslim communities. It is often linked to religious practices rather than broad financial literacy.
As for non-Muslim majority countries like the USA, UK, and Australia, Takaful awareness is minimal. It is mostly limited to small groups focused on ethical finance or academic discussions.
Conclusions
Takaful awareness in 2024 is different depending on the region. The Gulf Cooperation Council (GCC) countries have the highest awareness due to strong government support and integration into the financial system. Southeast Asian countries, especially Malaysia, also show good awareness levels, though some groups still lack access to Takaful products.
In the Middle East and North Africa (MENA), awareness is moderate, while in developing Muslim-majority countries like Afghanistan, it is low but improving slowly. Non-Muslim majority countries have very little awareness of Takaful.
With the Takaful insurance market expected to grow by 15.1% from 2024 to 2030, there is great potential for more people to learn about and use Takaful as a trustworthy financial option. As awareness and understanding increase, Takaful could become more widely accepted in the coming years.
