APAC’s takaful insurance market to grow fastest with 18.4% CAGR by 2032

Globally, the market is projected to bag $126.8b by 2032.

Asia-Pacific is expected to post the fastest growth in the takaful insurance market, with a projected compound annual growth rate (CAGR) of 18.4% between 2023 and 2032, driven by a large and diverse Muslim population and rising interest in Shariah-compliant financial products, according to a report by Allied Market Research.

Globally, the market is projected to grow from $31.7b in 2022 to $126.8b by 2032, representing a CAGR of 15.2%.

Gulf Cooperation Council (GCC) countries accounted for more than 40% of global takaful revenue in 2022, supported by favourable regulation, high income levels and large Muslim populations. 

The report attributes market growth to rising demand in Muslim-majority countries, the profit-sharing nature of takaful, and its alignment with Shariah principles. 

However, it notes that limited consumer awareness remains a key barrier to wider adoption. The study adds that untapped markets present significant opportunities, particularly in regions where takaful is still emerging.

By type, general takaful accounted for about three-quarters of total revenue in 2022.

The segment is expected to maintain its lead due to strong demand for coverage of homes, businesses, vehicles and other assets.

Family takaful, which covers life and family-related needs, is expected to record the fastest CAGR of 18.2% through 2032.

By distribution channel, agents and brokers generated more than half of market revenue in 2022 and are expected to remain the dominant channel during the forecast period. 

Their reach and personalised services are seen as key drivers. 

Direct response channels, including online and phone-based sales, are projected to grow at the fastest pace with a CAGR of 21.6%, supported by lower costs and greater accessibility.

By application, the commercial segment held nearly 60% of the market in 2022 and is expected to retain its lead due to complex risk management needs and regulatory requirements. 

The personal segment is forecast to expand at a CAGR of 17.2% as awareness of personal protection grows.