Amin Re, a leading reinsurance company in Iran, has applied for permission for starting Iran's first Takaful insurance company in Kish Island.
According to Risknews, Amin Re submitted application both to the Central Insurance company of Iran, the regulatory body of the industry, and the Kish Island Free Trade Zone Organization, whose permission is also mandatory for establishment of companies in the Persian Gulf island.
The move was welcomed by insurance authorities, and Amin Re is likely to get the approval for offering Islamic insurance services in Iran.
The regulator said earlier it seeks to unveil Islamic insurance solutions, also known as Takaful, this year, without providing details.
Economy Minister Ehsan Khanduzi has urged the insurance industry to include Islamic finance solutions in their innovation plans as it has considerable potential for growth.
The company's shares are set to be sold in the stock market.
Takaful is a type of Islamic insurance wherein members contribute money to a pool system to guarantee each other against loss or damage. Takaful-branded insurance is based on sharia or Islamic religious law and outlines how individuals are responsible to cooperate and protect one another. Takaful policies cover health, life, and general insurance needs.
All parties or policyholders in a Takaful arrangement agree to guarantee each other and make contributions to a pool or mutual fund instead of paying premiums.
The pool of contributions creates the Takaful fund. Each participant's contribution is based on the type of coverage they require and their personal circumstances.
A Takaful contract specifies the nature of the risk and the length of the coverage, similar to that of a conventional insurance policy.
The global takaful insurance market was said to be worth $24.85 billion in 2020 and is projected to reach $97.17 billion by 2030, growing at a compound annual growth rate of 14.6% from 2021 to 2030.
The Takaful market in the (Persian) Gulf Cooperation Council states remains at the forefront of the industry. The latest industry data reveals that the (P) GCC contributes more than 62% of the gross Takaful premiums globally.
Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the UAE are members of the council.
Amin Re, established in 2003, is among a handful of insurance firms licensed to operate in free trade zones. The firm is jointly owned by Iran Insurance Company, Dana Insurance and IFIC.
