DUBAI (Bloomberg) — The value of Islamic insurance premiums written in Persian Gulf states such as Saudi Arabia and Kuwait is rising about 16 times faster than the global average for conventional insurance, Standard & Poor’s said.Premiums for Islamic insurance, or Takaful, are growing by about 40 percent a year, while the global average for premium growth in 2005 was 2.5 percent, the ratings firm said in a report e-mailed yesterday. If the region can match global averages for insurance spending, its Takaful market will be worth $4 billion and its conventional insurance market another $16 billion, S&P said.

“A sizeable, underinsured population means that there are substantial prospects for further development of personal lines cover,” S&P analyst Jelena Bjelanovic said in the report.

Takaful, based on the Koranic principle of mutual assistance in which members are insurers as well as the insured, is surging in popularity as record oil earnings fuel economic growth in the Gulf. The global market for Takaful may expand fivefold to $14 billion by 2015, according to HSBC Holdings Plc.

Allianz SE of Germany, Europe’s biggest insurer, last month said it plans to set up a Takaful company in Bahrain. American International Group Inc., the world’s largest insurer, in October started a Bahrain-based Takaful unit targeting what it estimates are 300 million potential buyers of Islamic insurance cover.

The global Takaful industry is growing 15 percent a year, Abdallah Kubursi, AIG’s regional vice-president for the Middle East, yesterday told an industry conference in Dubai, United Arab Emirates. Takaful premiums written in the Arab world will rise almost 20-fold by 2015 to $4.2 billion from $170 million now, he said.

The Gulf’s Takaful market is now worth $170 million, S&P said. The industry’s future success depends its ability to “demonstrate the need for and benefits of insurance”.

Many of the world’s estimated 1.5 billion Muslims reject conventional insurance because they say it breaks Islamic Shariah law’s proscriptions against betting on future events.

[bul] Qatar Insurance Co., the Persian Gulf emirate’s biggest insurance underwriter, said yesterday that first-quarter profit rose 28 percent. The company provided no reason.

Net income climbed to 133 million riyals ($36.5 million), or 3.13 riyals a share, from 103.6 million riyals, or 2.44 riyals, a year earlier, the company said in a filing posted on the web-site of Qatar’s bourse.

Shares of the Doha-based company gained 2.1 percent to 92 riyals. The company didn’t provide any other information about its earnings.