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This is a sector with huge potential.

There are just under 100 insurance companies established in Luxembourg and regulated by the Commissariat aux assurances (CAA). Total premiums in 2009 were over €20 billion, nearly 17 billion of which were generated by cross-border life assurance sales.

Many international players such as Allianz, AXA and Zurich have operations in Luxembourg and most of them already offer takaful in targeted markets, such as Malaysia or the Gulf countries. This is also the case with service providers, such as the big audit firms, legal firms and custodians, which already offer services to takaful clients in other parts of the world and could leverage this expertise in the Grand Duchy.

Luxembourg is a popular domicile for insurance companies because it offers political and social stability, a wide spectrum of linguistic and financial competencies and a modern legislative framework. With 94% of the life business emanating from cross-border sales, takaful companies can leverage existing Luxembourg expertise to reach the Muslim customer base in Europe, estimated at 20 million people.

The bulk of life assurance policies in Luxembourg are unit-linked. Similarly, takaful contracts enable customers to combine insurance cover with return on shariah compliant investments.