New Report Highlights Role of Takaful in Building Climate Resilience

13 Dec, 2023

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A new report from the UNDP’s Insurance and Risk Finance Facility, the Islamic Development Bank (IsDB), and the Islamic Development Bank Institute (IsDBI) highlights opportunities, challenges, and recommendations for Takaful—a shariah-compliant insurance alternative—to build the financial resilience of at-risk Muslim communities against rising climate risks.

Titled ‘Insuring a Sustainable Future: Building Climate Resilience Through Takaful’ the report lays out the evidence and key recommendations for Takaful to be developed, implemented, and scaled to build the financial resilience of at-risk Muslim communities on the frontlines of climate change.

The report was released on 5 December 2023 during a COP28 event in Dubai, UAE. It covers the following key areas:

  • The influence of climate change on livelihoods and key economic sectors in countries with sizeable Muslim populations
  • Growing climate risks and limited resilience in countries with sizable Muslim populations
  • Challenges to conventional insurance adoption
  • The potential, advantages and challenges of adopting and scaling Takaful
  • High-level recommendations to enhance the financial resilience through Takaful

The report highlights significant potential in the Arab States region and beyond for the development of Takaful, achievable through innovative public-private partnerships between government and the insurance industry.

Access the full report here.

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