An Overview of the Emergence of Takaful: An Islamic Type of Insurance Policy

Zainuddin, Suria

doi:10.11648/j.ijber.20130205.13

Cited by 8 publications

(10 citation statements)

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“…In addition, numerous Western banks have established either Islamic banking subsidiaries or offered their customers Islamic financial products such as those provided by Citibank, Bank of America, HSBC, Union Bank of Switzerland and Goldman Sachs (Zaher and Hassan, 2001;Khan, 2010). Given the growing developments of the Islamic financial system, the Takaful industry has experienced significant growth and developments (Zainuddin and Noh, 2013), indicating a clear manifestation of the recognition of Islamic insurance as an important source of enhancing the Shariah (Islamic law), which refers to an Islamic way of joint guarantee [1]. According to Takaful Act of Malaysia, "Takaful is a scheme grounded on brotherhood, mutual assistance and solidarity, it offers financial aid which is mutual and provides assistance to policyholders when they are in need whereby policyholders reciprocally agree to make a contribution for that purpose".…”

Section: Introductionmentioning

confidence: 99%

Family Takaful in developing countries: the case of Middle East and North Africa (MENA)

Sherif

Hussnain

2017

I J Islam Mid East Fin and Mgt

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Purpose -The purpose of this paper is to investigate the driving forces (economics and socio-demographic) that influence family Takaful demand in the Middle East and North Africa (MENA) region, using a sample of 15 countries from the MENA.Design/methodology/approach -The authors use multivariate analysis, bootstrapping and generalised method of moments techniques. They first examine a full model that combines all variables; second, a model that controls for product market factors; and finally, a model that controls for sociodemographic factors. They further separate all models into linear and log-linear demand functions.Findings -The authors demonstrate that the relationship between the demand for family Takaful in MENA and Islamic banking deposits, education, dependency rate, female life expectancy and Muslim population is significantly positive. On the other hand, the significant factors that are inversely related to the demand for family Takaful in MENA are inflation, financial development and male life expectancy.Research limitation/implications -The crucial limitation of this study is the amount of data available in regards to the dependent variable, family Takaful contributions. Consequently, to improve the understanding in explaining the family Takaful demand in MENA, further research can take advantage of expanding the variables that were omitted in this research as a consequence of the unavailability of data. Some of the possible influential variables can include government social security expenditure, legal system and government policies, price of Takaful and level of competition within the Takaful and insurance industry.Originality/value -It is obvious that there are very few studies that focus on the MENA market, and indeed, none of them gives attention to the factors that influence demand for family Takaful. While this study is expected to provide more understanding and awareness on the concept of Takaful and the factors that influence its demand, the authors hope that it would encourage more studies on various issues on the Takaful industry so as to help researchers to understand more aspects of this new emerging business.

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Section: Introductionmentioning

confidence: 99%

Family Takaful in developing countries: the case of Middle East and North Africa (MENA)

Sherif

Hussnain

2017

I J Islam Mid East Fin and Mgt

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“…Therefore, they have recommended an alternative system to conventional insurance, that is, 'Takāful' (Farooq, Chaudhry, Alam, & Ahmad, 2010). Takāful is a kind of mutual risk sharing by the policyholders based on brotherhood and solidarity, therefore, in compliance with Sharī'ah law (Gonulal, 2012;Zainuddin & Noh, 2013). Operationally, Takāful does not involve risk shifting from the policy holders to the insurers.…”

Section: Objective Of the Case Articlementioning

confidence: 99%

Taking a Family Takaful Plan: Takaful Agent’s Perspective

2019

J. Islam. bus. manag.

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This article is an illustration of takāful distribution, depicting how a takāful agent makes new clients and the steps it takes to complete the whole process. Initially, a takāful agent visits a potential customer and collects information related to his financial worth, specific needs of takāful coverage and cost affordability. Then, after considering the potential customer's need and affordability, the agent selects two customized takāful plans to propose to the potential customer who selects one of the plans that best suits his needs. After a formal process and through several stages, the takāful coverage for the client is approved and starts. Multiple parties have played their role in the whole process. Hence, the article discusses the role of takāful company, medical laboratory, actuary, doctor, bank, income tax authorities, courier, etc.

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“…Under the conventional insurance, there is no any religious limit. The key determination of insurance is for commercial purpose only in the form of protecting financial risk from the sorrow the complete cost of those activities on the natural surroundings which affect the insurer negatively (Zainuddin and Noh, 2013 In the conventional insurance, risk is transferred from the insured (the policyholder) to the insurer (the insurance company).…”

Section: Takaful Located In Riyadh and Al-ahli Takaful Internationalmentioning

confidence: 99%

An Assessment of Customer’s Preferences on The Selection of Takaful Over Conventional: A Case of Saudi Arabia

Nazir

Noor

2018

TIFBR

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This paper aims at assessing the motivational factors that influence the customer's preferences of takaful over conventional insurance. The customers' information about the takaful products and services based on sharia are identified in order to enable them differentiate takaful and conventional insurance. The research uses mixed method of data collection. This comprises of questionnaires and in-depth interviews with the respondents from four selected takaful industries in Saudi Arabia. The questionnaires were analysed using simple percentages and for the interviews, thematic analyses were used. Based on the findings of the study, the customer's preferences on the selection of takaful over conventional insurance include protection of takaful product by sharia, support from the government. Similarly, the absence of risk incurred or transferred to participants, funds contributed in the spirit of brotherhood for all members. Moreover, another customer's preferences is that contributions (tabarru') are invested in non-interest based capitalization by the takaful agents and profits are shared according to individual contributions. Based on takaful, donations are established at the pooling system in line with sharia and they are formed on the bases of sympathy, consciousness of the idea of tabarru' as well as abstaining from gharar, maysir and riba.

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An Overview of the Emergence of Takaful: An Islamic Type of Insurance Policy

Cited by 8 publications

References 0 publications

Family Takaful in developing countries: the case of Middle East and North Africa (MENA)

Family Takaful in developing countries: the case of Middle East and North Africa (MENA)

Taking a Family Takaful Plan: Takaful Agent’s Perspective

An Assessment of Customer’s Preferences on The Selection of Takaful Over Conventional: A Case of Saudi Arabia

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