Development of takaful industry in Turkey: challenges and prospects

Abstract

The takaful/Islamic Insurance industry is rapidly growing across the globe. However, still, the volume of this sector is very small worldwide as well as in Turkey. This study focuses on discussing the size of growth and investment of Islamic Insurance in Turkey. Therefore, the study's central point focus on exploring and examining the development of the Islamic Insurance/Participation sector in the Turkey financial markets at large. Takaful|Islamic insurance in Turkey is known by other names called Participation insurance. In Turkey, both Islamic banking and the insurance industry operating based on shari'ah-complaint is known as participation, not Islamic. The Word participation comes from the Turkish language called "Katılım", which means participate. Thus, nowadays, in 2020, the market share of the participation|Takaful insurance in production reached 5.2% with approximately 4.3 billion TL. On the other hand, at the end of the same year, 2020, the market share of conventional insurance of life & non-life insurance gross written premium in Turkey is growing too, 82.5 billion TL. Even though the market share of the participation insurance sector seems insignificant when it is compared to the counterpart of conventional insurance, the market share of Islamic insurance begins growing from period to period as well.