Morgan Stanley in its latest report predicted that a growing demand for Takaful and reTakaful products in the MENA region as insurance penetration in the region increases. Kathy Fear, an insurance analyst at Morgan Stanley, said on the report “Salama - Interesting Opportunity in Niche Takaful Market,” believes that Salama is ideally placed to capitalize on the double digit growth forecast for both the Takaful and re-Takaful markets. Founded in 1979, Islamic Arab Insurance Co. (Salama), began as a relatively small Takaful player in the UAE market. This changed in 2005 when it underwent a capital increase of AED950 million and purchased the Bahraini Takaful holding company Tariic. This diversified Salama by providing operations across the Far East, Africa, Middle East and Turkey and Central Asia. Salama is now one of the few local Takaful players to enjoy a rating from S&P (BBB+). “Currently, regional penetration of conventional insurance products is well below that seen in more developed markets in both life and non-life insurance. For instance in the GCC alone insurance penetration as a percentage of GDP is just 0.9 percent versus 9.45 percent in the G7 countries (US, Canada, UK, France, Germany, Italy and Japan). Takaful penetration is even lower. For this reason, these markets offer substantial growth opportunities.” Fear said “the youthful demography, with 60 percent of the global Muslim population being under 25 years old, increasing awareness, a greater desire for Shariah-compliant offerings, and increasing asset based Shariah-compliant financing will drive growth in the Takaful marketplace.” “With operations in the Far East, Middle East, Africa, Central Asia and Turkey, Salama's geographic footprint will enable it to benefit from the growing opportunities throughout these markets. In addition, Salama is one of the few pure plays available to investors who wish to gain exposure to these regions.” She said Takaful and re-Takaful markets are expected to grow at least 20 percent per annum for the next three to five years. __