International banking giant HSBC Holdings unit HSBC Amanah Takaful Sdn Bhd will make Malaysia the centre for the group's global "takaful" or Islamic insurance business.

"We are considering using our dedicated takaful company here to branch out and go to other markets," chief executive officer Keith Driver was quoted as saying by the New Straits Times .

Takaful is an alternative to conventional insurance products. It is based on mutual co-operation in the sharing of risk and addresses key features associated with conventional insurance that do not comply with Muslim Syariah law.

The move will allow HSBC Amanah Takaful to reach new customers from among the world's 1.6 billion Muslims, the report said.

The global market for Islamic insurance could surge fivefold to US$14 billion by 2015, HSBC Holdings said.

"We have a competitive advantage here (in Malaysia). We have a takaful company, favourable fiscal initiatives that make it attractive commercially for basing here," Driver told the daily.

HSBC Amanah Takaful "can develop new products centrally and give them a home," he added.

HSBC Amanah Takaful is a joint venture between HSBC Insurance (Asia Pacific) Holdings Ltd, Jerneh Asia Bhd and the Employees Provident Fund, Malaysia's biggest state pension fund.

Malaysia, a predominantly Muslim country, has established itself as the Asian leader in Islamic banking and finance after introducing services in 1983.