In Kuwait, Islamic insurance is provided by dedicated takaful companies licensed by the Insurance Regulatory Unit, created by Law No. 125 of 2019, which prohibits a single insurer from writing both conventional business and takaful.
The Insurance Regulatory Unit, the sector authority
The IRU, known in Arabic as wahdat tanzim at-ta'min, was established by Law No. 125 of 2019, published in the Official Gazette on 1 September 2019. It enjoys financial and administrative autonomy and reports to the Ministry of Commerce and Industry.
The end of the 1961 law
The 2019 law replaced the 1961 text that had governed the Kuwaiti sector until then. Its implementing regulations, adopted in 2021 and in force since June 2022 according to Oxford Business Group, apply equally to conventional and takaful companies.
No Islamic window at a conventional insurer
A Kuwaiti company writes either conventional insurance or takaful, but never both. This makes checking easier for the customer: a takaful contract signed in Kuwait necessarily comes from a company fully dedicated to the Islamic model, not from an internal department.
Separate licences for each activity
Kuwaiti law draws a distinction between separate licences for insurance, for reinsurance, for takaful insurance, for takaful reinsurance, for foreign branches and for conglomerates. The workings of Islamic reinsurance are covered in detail in retakaful and how it works.
High capital requirements
The minimum fully paid-up capital is set at 5 million dinars for life, 5 million for non-life, 10 million for both and 15 million for conventional or takaful reinsurance, according to an analysis by Baker Tilly Kuwait.
Takaful subsidiaries of financial groups
Several operators are backed by financial groups: KFH Takaful by Kuwait Finance House, KIB Takaful by Kuwait International Bank, as well as Boubyan Takaful. Gulf Takaful, founded in 2020, is the Islamic subsidiary of the GIG group.
Two companies listed on the stock exchange
First Takaful, also known as Al-Oula Takaful, and Wethaq Takaful are the two takaful companies listed on Boursa Kuwait. Their public accounts make it possible to track results and financial strength, a useful point before any long-term commitment.
Other names in the Kuwaiti market
Oxford Business Group also cites Islamic Takaful, Kuwait International Takaful, Al Khaleej Takaful and National Takaful. In 2023, the KIC group acquired 81.8% of Kuwait Islamic Takaful Insurance Company, a sign of gradual consolidation in the sector.
A regulator that imposes sanctions
In February 2021, the IRU allowed Zamzam Takaful Insurance, which had been suspended, to resume operations after correcting the breaches identified. This episode shows the value of checking an operator's licence status at the very moment of subscription.
Sixteen national takaful companies in 2019
A ministerial statement of 15 May 2019 counted 39 insurers, including 28 national ones: 16 takaful and 12 conventional companies, plus 11 Arab or foreign firms. The number of Islamic entities was therefore high relative to the size of the market.
A still modest stock market weight
In the first half of 2025, the two listed takaful companies generated around 5 million dinars out of 576 million in revenue for listed insurers, or 1%. Their revenue nevertheless grew by 9%, against a 13% fall for conventional insurers.
Profitability and choice of model
Again according to Oxford Business Group, the profit of the two listed takaful companies jumped by 240% year on year. For the customer, what matters most is the clarity of the wakala management model and of the surplus sharing rules.
Choosing a takaful company in Kuwait
- Check with the Insurance Regulatory Unit that the company holds a valid takaful insurance licence.
- Confirm that the company is entirely takaful, since Kuwaiti law prohibits mixed activities within a single insurer.
- Ask which model applies, wakala, mudaraba or hybrid, and request the rulings of the Kuwaiti company's sharia committee.
- Compare contributions, management fees and the surplus clause at two or three operators, for example a bank subsidiary and a listed company.
- Read the exclusions, deductibles and waiting periods before signing anything.
- If a claim arises, send a written notification with supporting documents and follow the file until settlement.
What the takaful contribution covers in Kuwait
| Item | Function | Factors of variation |
|---|---|---|
| Contribution (tabarru) | Finances the participants' solidarity fund | Risk covered, sum insured, claims history |
| Wakala fee | Pays for management by the company | Rate specific to each Kuwaiti operator |
| Mudaraba share | Rewards investment management | Performance of sharia-compliant assets |
| Underwriting surplus | Excess possibly returned to participants | Fund result and written contract rules |
| Deductible | Remains payable by the policyholder | Level chosen at subscription |
Documents to prepare in Kuwait
- Kuwaiti civil ID or passport with residence permit
- Proof of address in Kuwait
- Vehicle registration certificate for motor takaful
- Title deed or tenancy agreement for a home
- Health questionnaire for family takaful
- Murabaha or ijara contract where Islamic financing is secured
Pitfalls to avoid in the Kuwaiti market
- Thinking a Kuwaiti conventional insurer can offer an Islamic range, when Law No. 125 of 2019 reserves takaful for dedicated companies.
- Overlooking licence status, even though the IRU can suspend an operator, as happened with Zamzam Takaful Insurance.
- Choosing an offer only because it carries the name of an Islamic bank, without reading the contract or the sharia opinion.
- Assuming the surplus will be redistributed when the relevant clause is not spelled out in the Kuwaiti policy.
- Relying on old lists of insurers, when the market changes through acquisitions, such as KIC taking control of KITIC in 2023.
Common questions about Kuwaiti takaful
Which body supervises takaful in Kuwait?
The Insurance Regulatory Unit, created by Law No. 125 of 2019 and attached to the Ministry of Commerce and Industry. It issues separate licences for takaful insurance and takaful reinsurance, and its 2021 regulations also apply to conventional companies.
Do Kuwaiti banks sell takaful?
Several Islamic financial groups own a takaful subsidiary, such as KFH Takaful for Kuwait Finance House or KIB Takaful for Kuwait International Bank. The contract is then issued by the licensed subsidiary, which by law must be entirely dedicated to takaful.
How many takaful companies are listed on Boursa Kuwait?
Two: First Takaful, also called Al-Oula Takaful, and Wethaq Takaful. In the first half of 2025, they accounted for about 1% of listed insurers' revenue, but their profit rose by 240% year on year according to Oxford Business Group.
How much capital must a Kuwaiti takaful company hold?
The law sets a minimum fully paid-up capital of 5 million dinars for life or non-life, 10 million for both activities and 15 million for reinsurance, whether conventional or takaful.