An Evaluation of Takaful Insurance : Case of Pakistan

Hanif, Muhammad; Iqbal, Abdullah

doi:10.12816/0051159

Cited by 3 publications

(3 citation statements)

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“…According to Hanif and Iqbal (2014), the liberalization of Muslim-populated countries in the twentieth century led the financial planners to redesign the financial system with a blend of Islamic ideology. The series of efforts responsible for the establishment of "Islamic Development Bank" and "Islamic Insurance Institution" in 1979 (Jamil, 2016).…”

Section: Global Practicementioning

confidence: 99%

Takaful models: origin, progression and future

Hassan

2019

JIMA

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Purpose The concept of Takaful has a long history. It is linked with the era of Prophet Muhammad 1,400 years ago. The globalization and development of socio-economic systems have made business activities more complex in response to emerging human needs and requirements. Similarly, Takaful insurance has fully commercialized and become an important indicator of the international financial market. The purpose of this study is to understand the Takaful mechanism and progression of its procedures to date since its inception. Design/methodology/approach This study seeks to examine the origin, evolution and historical developments of Takaful mechanism, operations, models and governing framework with extant literature review from previous studies and current practices. Findings The modern Takaful insurance first began in Sudan back in 1979. The Takaful operations must abide by the Sharia laws and work under the supervision of the Sharia Supervisory Board. Since its evolution, Sharia scholars have introduced various Takaful models that are going to be explained in this study. Moreover, several Islamic organizations, including the “Islamic Financial Services Board” and the “Accounting and Auditing Organization for Islamic Financial Institutions,” have provided guidelines and supervision to develop and strengthen the Takaful industry further. The study acknowledges Takaful as a growing insurance industry with huge potential and promising future in both Pakistan and the international market. Practical implications During the analysis, various deficiencies and loopholes were identified, which are responsible for the unmatched growth of conventional insurance. They can be eliminated with the joint efforts of industrial players, Sharia scholars and Takaful insurance companies. Hence, Islamic scholars and academic researchers are encouraged to develop and modify the current practices of Takaful mechanism according to current market demands and consumer approach. The research efforts will help Takaful operators to develop more innovative Takaful products adhering Sharia compliance. Consequently, it will help to access more consumer market and further enhances the Takaful growth. Originality/value This study is an effort to provide a basic understanding of the mechanism of Takaful models. The study helps to comprehend how Takaful models have evolved and been modified over the course of time. Moreover, it provides a base for further development and improvement in current practices of Takaful models, which will result in increased progress for the Takaful industry.

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Section: Global Practicementioning

confidence: 99%

Takaful models: origin, progression and future

Hassan

2019

JIMA

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“…Combination of minds may work to an extent, however, unless we have the people trained in both streams of knowledge (Islamic jurisprudence and modern business and finance), the issue cannot be addressed at length. Hence, it is an important need to design and offer higher education degrees in the areas of Islamic economics and business, covering courses from Shari'ah as well as management sciences (Hanif & Iqbal, 2017) 4. Islamic finance advocates equitable distribution of wealth (Chapra, 2008).…”

Section: Challeng E Smentioning

confidence: 99%

Islamic financial services industry: Aspirations and achievements

Hanif

Ayub

2021

Business Ethics Env & Resp

Self Cite

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Islamic Financial Services Industry (IFSI) crosses the age of 40 years, and sufficient empirical evidence exists to evaluate in light of the distinctive aspirations. This study fills the gap in the literature by evaluating the performance of IFSI in light of Islamic finance objectives-financial stability, equitable distribution of wealth and social responsibility; Shari'ah principles, and professional practices. Our investigation documents the achievements based on real accounting data from 23 countries, and the suitability of tools in practice to achieve the stated objectives by promotors of IFSI. Findings suggest that the objectives of IFSI have been achieved to an extent. However, visible contribution to the achievement of socio-economic justice is yet to emerge. Practical application of tools shows divergence (in spirit) from the original design, primarily to achieve integration and coherence with the prevailing conventional financial system. IFSI needs collaborative efforts to overcome the challenges at hand.

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“…A large takaful organization, particularly the Pak-Kuwait Takaful limited company commenced their operations in 2006 based on Wakala-Waqf model. The SECP in recent times gave license to five more life insurance companies to elevate the market (Hanif & Iqbal, 2017). Of estimated 200 million Pakistani people, access to insurance is very low when most people are left unprotected and unaware.…”

Section: Literature Review and Prepositioningmentioning

confidence: 99%

Determinants of Customer Perception about adoption of Islamic Insurance (Takaful) in Pakistan

Khan

Rashid

Yaqub

et al. 2020

JBSEE

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The purpose of this study is to assess the response level of individuals concerning Islamic Insurance in Pakistan and to measure its outreach and most pertinent factors affecting customer selection of Islamic Insurance. It also seeks to make informed recommendations on empowering frameworks for the establishment of Takaful insurance through relevant marketing campaigns in Pakistan. The impact of factors like Customer Awareness, Consumer Satisfaction, Risk Perception, Compatibility and Religiosity was checked on Adoption of Islamic Insurance in Pakistan, with the presence of Social Influence as a mediating variable. Data were collected through questionnaire administered to 300 respondents, representing the Muslim community from urban as well as rural areas, of Pakistan. Partial least square-structural equation modeling (PLS-SEM) through Smart PLS3 was used to examine the relationships among pertinent factors in this study. The findings suggest that most respondents are either not aware of Takaful as an insurance and investment option, or do not understand the concept altogether. This study suggests that Islamic insurance organizations should focus on awareness campaigns as an essential marketing strategy and dedicated resources to reach prime customer segments in general and fulfil the need to inform people about their products and services through clear understanding of principles of Shariah compliance. The findings of this research have important implications for Takaful companies as well as regulators and general insurance customers.

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An Evaluation of Takaful Insurance : Case of Pakistan

Abstract: The version in the Kent Academic Repository may differ from the final published version. Users are advised to check http://kar.kent.ac.uk for the status of the paper. Users should always cite the published version of record.

Cited by 3 publications

References 1 publication

Takaful models: origin, progression and future

Takaful models: origin, progression and future

Islamic financial services industry: Aspirations and achievements

Determinants of Customer Perception about adoption of Islamic Insurance (Takaful) in Pakistan

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