"Growth in takaful is phenomenal," Peter Hodgins, partner at international law firm Clyde & Co, told the Reuters Islamic Banking and Finance Summit in Dubai.
"In percentage terms it is growing faster than the Islamic finance sector and 30, 40 or 50 percent growth in premiums is not unheard of."
He said growth in the takaful industry is slowing slightly as people have less cash to spend on what is considered to a certain degree to be a "luxury item", but it still has the potential to compete with conventional insurance.
A recent report by HSBC estimated the global takaful market at $14.4 billion by 2010.
Some takaful products being offered are not as attractive to certain clients because they are not considered Islamic enough, said Ashley Painter, a second partner at Clyde & Co.
"It is only an emerging industry, so as people do it more and more, they get more experience about what is acceptable and what is not," he said.
Under takaful, the risk and reward are shared between the customer and insurer, while in conventional insurance the insurer takes on all the risk for a premium.
Clyde & Co has offices in Dubai, Abu Dhabi, Doha and Riyadh and has been in the region for more than 20 years according to its website.(Reporting by Jason Benham; editing by Sam Cage and David Cowell)