Malaysian Islamic reinsurer MNRB Retakaful is keen to tap the market for sharia-compliant reinsurance in the Middle East, Pakistan and South Africa, its chief executive said on Monday.

MNRB aims to do business in Kuwait, Saudi Arabia and the United Arab Emirates from Malaysia by year-end, the company’s CEO Ismail Mahbob told reporters. Its present foreign markets are Indonesia, Brunei and Sri Lanka.

’Takaful (Islamic insurance) in these countries is still new, even the Muslim countries,’ Mahbob said on the sidelines of an Islamic finance forum.

’But as far as the non-Muslim countries, there are countries that already have takaful operations, places like South Africa, so we are also focusing on them.’

Industry data estimates the size of the market for Islamic reinsurance, or retakaful, at about $1 billion.

Global premiums in Islamic insurance, or takaful, total about $2-3 billion now and are expected to reach $7.4 billion by 2015, according to industry figures.

Islamic scholars frown on conventional insurance, saying the use of interest-bearing investments and the lack of certainty in the size of policy payments violate sharia principles.

Under Islamic insurance, members contribute to a pool of funds which is used to indemnify participants who suffer a loss.

The funds are invested according to the sharia which shuns interest-bearing loans and gambling, pork and alcohol-related activities.

Profits made are distributed among members. Mostly Muslim Malaysia is a leading global centre of Islamic finance.

It has the world’s largest Islamic bond market, accounting for just under two-thirds of global Islamic bonds outstanding which are worth about $100 billion, central bank estimates show.-Reuters