DUBAI (Bloomberg) — Islamic insurance premiums world-wide will jump more than five-fold to $11 billion by 2015 as Muslims become richer and economic growth spawns large industrial projects, American International Group, Inc. forecast.“The industry is growing at 15 percent a year, and there is strong demand from indigenous populations,” Abdallah Kubursi, regional vice-president for the Middle East at AIG, told a conference in Dubai yesterday. AIG, based in New York, is the world’s largest insurer.

Rising oil revenue in the Arab world, multi-billion-dollar infrastructure projects and a awareness that Islamic insurance products — known as takaful — can be competitively priced will drive growth, Kubursi said. Islamic insurers wrote annual premiums of $2 billion in 2005, according to a report by Moody’s Investors Service.

Islamic insurance is similar to mutual insurance in that members are the insurers as well as the insured. An increasing preference among the world’s more than one billion Muslims to buy cover compliant with their religious beliefs is driving demand for Islamic insurance products.

Premiums in the Arab world will rise nearly 20-fold by 2015 to $4.2 billion from $170 million now, Kubursi said. Southeast Asia will contribute $3.7 billion and the rest of the world $3.1 billion to Islamic insurance industry premiums, while the family insurance segment will make up 63 percent of the overall market by 2015, he said.