1. Takaful, or Islamic insurance, originated from early Islamic community practices of pooling resources to help cover financial losses. It operates based on Sharia principles of welfare, shared responsibility, and cooperation.
2. There are three main models of takaful contracts: wakalah, mudarabah, and a hybrid model. Wakalah uses an agency fee structure while mudarabah is a profit-sharing model between participants and managers.
3. Key differences between takaful and conventional insurance include that takaful participants are both the insurer and insured through risk-sharing, and investments must be Sharia-compliant rather than allowing interest.
Takaful industry in Pakistan,GCC & Malaysia: Growth Challenges & future Prosp...Aamer Rahim
This document provides an introduction and overview of Takaful (Islamic insurance). It discusses:
1) The background and need for an Islamic alternative to conventional insurance due to issues like gharar (uncertainty) and riba (interest).
2) The key principles of Takaful including tabarru (voluntary donation or contribution) and ta'awun (mutual assistance).
3) The types of Takaful products and some ongoing Shariah issues regarding concepts like nomination, distribution of surplus, and tabarru.
Takaful industry in Pakistan,GCC & Malaysia: Growth Challenges & future Prosp...Aamer Rahim
This document provides an introduction and overview of Takaful (Islamic insurance). It discusses:
1) The background and need for an Islamic alternative to conventional insurance due to issues like gharar (uncertainty) and riba (interest).
2) The key principles of Takaful including tabarru (voluntary donation or contribution) and ta'awun (mutual assistance).
3) The types of Takaful products and some ongoing Shariah issues regarding concepts like nomination, surplus distribution, and tabarru that the industry continues working to address.
The document compares and contrasts insurance and takaful. It provides details on:
1) Insurance is a contract where one party agrees to take on the risk of another in exchange for premium payments. The risk bearer is the insurer and the party whose risk is covered is the insured.
2) Takaful is an Islamic insurance system based on mutual assistance and donation, where risks are shared collectively. It follows the principles of tabarru (donation) and ta'awun (mutual guarantee).
3) There are several takaful models including mudarabah, wakalah, and waqf models. The waqf model establishes a waqf fund through shareholder contributions to compensate
Takaful is an Islamic insurance system where individuals contribute money into a pooled fund to guarantee each other against loss and damage. It is based on the Islamic principles of mutual responsibility and solidarity where people cooperate to protect one another. There are two main types: general takaful which provides short-term coverage for risks like property and motor insurance, and family takaful which offers long-term savings and protection benefits. Takaful operations use models like wakala, mudaraba, or a hybrid to structure the relationships between participants and operators. At the end of the coverage period, any surplus from the pooled funds is distributed back to participants and operators according to a pre-agreed ratio.
Takaful is an Islamic insurance concept based on mutual assistance and cooperation. It involves participants contributing to a common fund, which is used to pay compensation to any participant who suffers losses according to the terms of the Takaful agreement. There are different models for structuring Takaful, such as the Tabarru' model where contributions are seen as donations, or the Mudharabah model where profits from investing contributions are shared. Takaful aims to be free from elements like uncertainty and gambling that are prohibited in Islam. It is overseen by a Sharia Supervisory Council to ensure compliance.
Takaful is an Islamic insurance alternative that is based on principles of mutual cooperation and responsibility. It provides a way for Muslims to protect against risks in accordance with Sharia law. Takaful operates through pools funded by contributions from policyholders. Any surpluses are distributed among members, while deficits are covered by a special reserve without interest. Takaful structures use agency or partnership contracts to manage funds and ensure operations comply with Islamic laws and avoid interest, gambling, and uncertainty.
1. Takaful is an Islamic insurance model based on mutual assistance and solidarity where participants contribute funds to help others in times of need, as opposed to conventional insurance which is based on a commercial transaction.
2. Conventional insurance involves elements prohibited in Islam like maisir (gambling) and gharar (uncertainty), and may invest funds in interest-bearing assets. Takaful aims to be free from these elements and can only invest in Sharia-compliant assets and businesses.
3. The key differences are that in Takaful, benefits are paid from participants' funds, profits are shared among participants, and the model operates according to Sharia principles of avoiding riba and promoting risk-
Takaful industry in Pakistan,GCC & Malaysia: Growth Challenges & future Prosp...Aamer Rahim
This document provides an introduction and overview of Takaful (Islamic insurance). It discusses:
1) The background and need for an Islamic alternative to conventional insurance due to issues like gharar (uncertainty) and riba (interest).
2) The key principles of Takaful including tabarru (voluntary donation or contribution) and ta'awun (mutual assistance).
3) The types of Takaful products and some ongoing Shariah issues regarding concepts like nomination, distribution of surplus, and tabarru.
Takaful industry in Pakistan,GCC & Malaysia: Growth Challenges & future Prosp...Aamer Rahim
This document provides an introduction and overview of Takaful (Islamic insurance). It discusses:
1) The background and need for an Islamic alternative to conventional insurance due to issues like gharar (uncertainty) and riba (interest).
2) The key principles of Takaful including tabarru (voluntary donation or contribution) and ta'awun (mutual assistance).
3) The types of Takaful products and some ongoing Shariah issues regarding concepts like nomination, surplus distribution, and tabarru that the industry continues working to address.
The document compares and contrasts insurance and takaful. It provides details on:
1) Insurance is a contract where one party agrees to take on the risk of another in exchange for premium payments. The risk bearer is the insurer and the party whose risk is covered is the insured.
2) Takaful is an Islamic insurance system based on mutual assistance and donation, where risks are shared collectively. It follows the principles of tabarru (donation) and ta'awun (mutual guarantee).
3) There are several takaful models including mudarabah, wakalah, and waqf models. The waqf model establishes a waqf fund through shareholder contributions to compensate
Takaful is an Islamic insurance system where individuals contribute money into a pooled fund to guarantee each other against loss and damage. It is based on the Islamic principles of mutual responsibility and solidarity where people cooperate to protect one another. There are two main types: general takaful which provides short-term coverage for risks like property and motor insurance, and family takaful which offers long-term savings and protection benefits. Takaful operations use models like wakala, mudaraba, or a hybrid to structure the relationships between participants and operators. At the end of the coverage period, any surplus from the pooled funds is distributed back to participants and operators according to a pre-agreed ratio.
Takaful is an Islamic insurance concept based on mutual assistance and cooperation. It involves participants contributing to a common fund, which is used to pay compensation to any participant who suffers losses according to the terms of the Takaful agreement. There are different models for structuring Takaful, such as the Tabarru' model where contributions are seen as donations, or the Mudharabah model where profits from investing contributions are shared. Takaful aims to be free from elements like uncertainty and gambling that are prohibited in Islam. It is overseen by a Sharia Supervisory Council to ensure compliance.
Takaful is an Islamic insurance alternative that is based on principles of mutual cooperation and responsibility. It provides a way for Muslims to protect against risks in accordance with Sharia law. Takaful operates through pools funded by contributions from policyholders. Any surpluses are distributed among members, while deficits are covered by a special reserve without interest. Takaful structures use agency or partnership contracts to manage funds and ensure operations comply with Islamic laws and avoid interest, gambling, and uncertainty.
1. Takaful is an Islamic insurance model based on mutual assistance and solidarity where participants contribute funds to help others in times of need, as opposed to conventional insurance which is based on a commercial transaction.
2. Conventional insurance involves elements prohibited in Islam like maisir (gambling) and gharar (uncertainty), and may invest funds in interest-bearing assets. Takaful aims to be free from these elements and can only invest in Sharia-compliant assets and businesses.
3. The key differences are that in Takaful, benefits are paid from participants' funds, profits are shared among participants, and the model operates according to Sharia principles of avoiding riba and promoting risk-
Takaful is an Islamic alternative to conventional insurance that is based on mutual cooperation and responsibility among participants. It avoids elements like interest, gambling and uncertainty that are prohibited in Islamic finance. There are different business models for Takaful including Mudarabah, Wakalah and Waqf. While Takaful has grown significantly in recent decades, it still only accounts for a small portion of the potential market among the world's Muslim population. The Takaful industry faces challenges in standardizing business practices but also has opportunities for continued strong growth in both existing and new markets.
Takaful is an Islamic alternative to conventional insurance that is based on mutual assistance and cooperation between participants. It involves participants contributing to a common pool and receiving compensation from that pool in the event of a valid claim. Takaful aims to avoid elements of uncertainty (gharar) and gambling (maisir) that are prohibited in Islamic finance by structuring the arrangement as a cooperative donation (tabarru) scheme rather than a commercial insurance contract involving the exchange of risk for premium. General takaful provides short-term coverage for risks like motor, health, fire and marine insurance through participants' contributions to the general takaful fund.
Takaful is an Islamic alternative to conventional insurance that is based on mutual cooperation and donation rather than commercial transactions. It involves participants contributing to a common fund as a tabarru (donation) to be used to compensate members in case of valid claims. This spreads risk among members and draws from historical systems like aaqilah. Takaful minimizes issues of riba, gharar and maisir by operating through tabarru rather than interest-based investments. General takaful provides short-term coverage through contributions invested and profits shared according to set ratios to cover operational costs.
The document provides an overview of Takaful (Islamic insurance) including:
1. Takaful is based on mutual protection and joint guarantee, with participants contributing to a common fund to provide indemnity in case of loss.
2. There are different Takaful models including Mudaraba and Wakala that structure the risk-sharing and distribution of surpluses.
3. Takaful has grown significantly in recent decades and now operates in over 40 countries, providing an alternative to conventional insurance that is in line with Sharia principles.
This presentation provides an overview of Takaful (Islamic insurance):
1) Takaful is an alternative to conventional insurance that is based on mutual assistance and joint guarantee between participants. It follows Shariah principles by avoiding elements of uncertainty, gambling and interest.
2) There are different Takaful models including Mudaraba and Wakala that structure the risk-sharing arrangement and distribution of surplus between participants and the Takaful operator.
3) Takaful Pakistan Limited is a new Takaful company that aims to set benchmarks for client service, operations and prudent underwriting in the growing Pakistani Takaful market.
This presentation provides an overview of Takaful (Islamic insurance):
1) Takaful is based on mutual protection and joint guarantee, with participants contributing to a common fund to provide indemnity in case of loss. It avoids elements of uncertainty, gambling and interest that are objections to conventional insurance.
2) There are various Takaful models including Mudaraba and Wakala that structure the operations and distribution of surplus differently but are based on cooperation instead of profit-maximization.
3) Takaful Pakistan Limited is a new company that offers both general and family Takaful products in Pakistan, which has strong potential for Takaful given its predominantly Muslim population.
This document discusses Islamic financial planning and takaful (Islamic insurance). It begins by defining takaful and explaining how it differs from conventional insurance by being based on mutual assistance and contribution to a common fund. The document outlines the key concepts of tabarru' (donation) and mudharabah (profit-sharing) business models used by takaful operators. It then discusses how to determine the appropriate amount of takaful coverage needed based on a family's monthly expenses and existing financial resources. The document provides approaches like using a multiple of one's salary or assessing actual needs to estimate a maintenance fund size. It emphasizes the importance of choosing a takaful policy that matches one's specific needs and objectives
Takaful is an Islamic insurance system based on mutual assistance and donation. It involves participants voluntarily contributing to a collective fund to guarantee each other against losses. If a participant suffers a loss, they receive money from the fund to help cover costs. Any surplus contributions are shared among participants according to a Mudarabah agreement. Takaful aims to help those in need without involving interest, gambling or other prohibited elements unlike conventional insurance.
The document provides an overview of Takaful (Islamic insurance), including its definition, differences from conventional insurance, various Takaful models and types, the history and development of Takaful in Pakistan, and prospects for growth in Pakistan. It also introduces Takaful Pakistan Limited, a new Takaful company established in Pakistan as a joint venture between local and international institutions.
This document discusses the differences between conventional insurance and Islamic (takaful) insurance. It explains that takaful is based on risk-pooling and mutual guarantee between participants, avoiding issues like riba (interest), gharar (uncertainty), and maisir (gambling) that are present in conventional insurance. It describes the key concept of tabarru in takaful, where participants donate contributions to a common fund to mutually insure one another. If the fund faces a deficit, the operator can provide an interest-free loan (qard hassan) to ensure solvency, though the terms of repayment are sometimes unclear.
The document discusses Takaful, which is an Islamic form of insurance that complies with Sharia law. It explains that conventional insurance contains elements like interest (riba), gambling (maisir), and uncertainty (gharar) that are forbidden in Islam. Takaful was developed as an alternative based on mutual assistance and joint guarantee between policyholders. It uses models like Mudarabah, where profits and losses are shared, and Wakalah, where the Takaful company manages the fund for a fee. The key features of Takaful are that policyholders own the contributions pool rather than the company, and any surplus is distributed back to policyholders.
Insurance is a contract where an individual or entity receives financial protection from losses in exchange for paying premiums. Companies pool risks to make premiums affordable. There are two main types of insurance - life insurance which pays out a sum when a person dies, and non-life insurance which covers other losses or liabilities. Within these are various products like health, property, vehicle and travel insurance. Regulations ensure customer protection and industry growth.
The document provides an overview of the fundamentals of Takaful, which is an Islamic insurance system based on mutual cooperation and donation. It discusses the key principles of Takaful, including tabarru' (donation), ta'awun (mutual cooperation), and mudharabah (profit-sharing). The three elements typically found in conventional insurance that are not compliant with Islamic law - gharar (uncertainty), maisir (gambling) and riba (interest) - are also examined. The document then outlines the basic Takaful operating models used in practice and the legal/regulatory framework governing the Takaful industry in Malaysia.
This document provides an overview of insurance, including:
1. Insurance protects against economic losses by spreading risk across many policyholders who pay premiums into a common fund. It aims to ensure continuity of financial benefits when losses occur.
2. Insurance provides security, supports pensions and savings/investments, acts as collateral for loans, and offers tax benefits.
3. Insurance evaluates and prices risks, shares risks collectively, prevents losses by encouraging safety, and allows larger risks to be covered with smaller capital investments.
Stress management project report @ icici bank Babasab Patil
This document provides a table of contents for a report on consumer behavior towards insurance products with ICICI Prudential as a case study. The executive summary introduces the topics to be covered, including the need for insurance, company profile of ICICI Prudential, vision and products offered, stress management, findings and suggestions. The introduction section provides background on life insurance including its origin and development in India. It outlines the key regulations established by the Insurance Regulatory and Development Authority.
Takaful, or Islamic insurance, is a cooperative scheme where participants pay contributions into a common risk pool. It is based on the principles of mutual assistance and donation rather than risk transfer. Takaful aims to avoid issues like riba (interest), gharar (uncertainty), and maisir (gambling) that are prohibited in Islam. General takaful contracts involve participants making donations to cover fellow participants' losses. The takaful operator manages the fund and provides assistance if it becomes insolvent. Takaful differs from conventional insurance by being based on cooperation instead of commercial exchange and by investing contributions in sharia-compliant ways.
Takaful is an Islamic alternative to conventional insurance based on mutual assistance and contribution to a common fund. There are various models of takaful including mudarabah, wakalah, and hybrid models. Main products include general takaful for assets and family takaful for life events. Any surplus from contributions after claims and expenses are distributed according to Shariah principles or used to cover deficits according to predetermined options.
This document summarizes the key differences between conventional insurance and Islamic insurance (takaful). Takaful is based on risk-pooling and mutual protection among policyholders, rather than risk transfer from policyholders to insurers. It avoids elements of riba (interest), gharar (uncertainty), and maisir (gambling) through a cooperative donation scheme where participants contribute to a common fund to make payouts to those affected by losses. While based on tabarru (donation), takaful also provides participants rights to claim compensation, so it is considered a qualified rather than pure tabarru contract.
The document discusses Takaful, the Islamic alternative to conventional insurance. It begins with an introduction to Takaful and the differences between Takaful and conventional insurance. It then covers the history and evolution of Takaful over time, the different types of Takaful coverage, and Takaful models used worldwide. The document also addresses the target market for Takaful, challenges facing the Takaful industry, and prospects for growth in Turkey. It concludes with a discussion of operational aspects of the Takaful model and challenges that still need to be addressed.
Topic vi. islamic insurance takaful (7 files merged)SaudBilal1
This document provides an overview of Islamic insurance (takaful) and its basic concepts. It discusses the key features of takaful including cooperative risk sharing, clear financial segregation, and Shariah-compliant policies and strategies. The major differences between takaful and conventional insurance are explained relating to the parties to the contract, payment of premiums, and investment of insurance funds. Various takaful models are outlined including mudarabah, wakalah, hybrid, and waqf models. Finally, the document describes the main takaful products of general and family takaful and discusses underwriting surplus, technical provisions, and how to address deficits in participants' risk funds.
Takaful is an Islamic alternative to conventional insurance that is based on mutual cooperation and responsibility among participants. It avoids elements like interest, gambling and uncertainty that are prohibited in Islamic finance. There are different business models for Takaful including Mudarabah, Wakalah and Waqf. While Takaful has grown significantly in recent decades, it still only accounts for a small portion of the potential market among the world's Muslim population. The Takaful industry faces challenges in standardizing business practices but also has opportunities for continued strong growth in both existing and new markets.
Takaful is an Islamic alternative to conventional insurance that is based on mutual assistance and cooperation between participants. It involves participants contributing to a common pool and receiving compensation from that pool in the event of a valid claim. Takaful aims to avoid elements of uncertainty (gharar) and gambling (maisir) that are prohibited in Islamic finance by structuring the arrangement as a cooperative donation (tabarru) scheme rather than a commercial insurance contract involving the exchange of risk for premium. General takaful provides short-term coverage for risks like motor, health, fire and marine insurance through participants' contributions to the general takaful fund.
Takaful is an Islamic alternative to conventional insurance that is based on mutual cooperation and donation rather than commercial transactions. It involves participants contributing to a common fund as a tabarru (donation) to be used to compensate members in case of valid claims. This spreads risk among members and draws from historical systems like aaqilah. Takaful minimizes issues of riba, gharar and maisir by operating through tabarru rather than interest-based investments. General takaful provides short-term coverage through contributions invested and profits shared according to set ratios to cover operational costs.
The document provides an overview of Takaful (Islamic insurance) including:
1. Takaful is based on mutual protection and joint guarantee, with participants contributing to a common fund to provide indemnity in case of loss.
2. There are different Takaful models including Mudaraba and Wakala that structure the risk-sharing and distribution of surpluses.
3. Takaful has grown significantly in recent decades and now operates in over 40 countries, providing an alternative to conventional insurance that is in line with Sharia principles.
This presentation provides an overview of Takaful (Islamic insurance):
1) Takaful is an alternative to conventional insurance that is based on mutual assistance and joint guarantee between participants. It follows Shariah principles by avoiding elements of uncertainty, gambling and interest.
2) There are different Takaful models including Mudaraba and Wakala that structure the risk-sharing arrangement and distribution of surplus between participants and the Takaful operator.
3) Takaful Pakistan Limited is a new Takaful company that aims to set benchmarks for client service, operations and prudent underwriting in the growing Pakistani Takaful market.
This presentation provides an overview of Takaful (Islamic insurance):
1) Takaful is based on mutual protection and joint guarantee, with participants contributing to a common fund to provide indemnity in case of loss. It avoids elements of uncertainty, gambling and interest that are objections to conventional insurance.
2) There are various Takaful models including Mudaraba and Wakala that structure the operations and distribution of surplus differently but are based on cooperation instead of profit-maximization.
3) Takaful Pakistan Limited is a new company that offers both general and family Takaful products in Pakistan, which has strong potential for Takaful given its predominantly Muslim population.
This document discusses Islamic financial planning and takaful (Islamic insurance). It begins by defining takaful and explaining how it differs from conventional insurance by being based on mutual assistance and contribution to a common fund. The document outlines the key concepts of tabarru' (donation) and mudharabah (profit-sharing) business models used by takaful operators. It then discusses how to determine the appropriate amount of takaful coverage needed based on a family's monthly expenses and existing financial resources. The document provides approaches like using a multiple of one's salary or assessing actual needs to estimate a maintenance fund size. It emphasizes the importance of choosing a takaful policy that matches one's specific needs and objectives
Takaful is an Islamic insurance system based on mutual assistance and donation. It involves participants voluntarily contributing to a collective fund to guarantee each other against losses. If a participant suffers a loss, they receive money from the fund to help cover costs. Any surplus contributions are shared among participants according to a Mudarabah agreement. Takaful aims to help those in need without involving interest, gambling or other prohibited elements unlike conventional insurance.
The document provides an overview of Takaful (Islamic insurance), including its definition, differences from conventional insurance, various Takaful models and types, the history and development of Takaful in Pakistan, and prospects for growth in Pakistan. It also introduces Takaful Pakistan Limited, a new Takaful company established in Pakistan as a joint venture between local and international institutions.
This document discusses the differences between conventional insurance and Islamic (takaful) insurance. It explains that takaful is based on risk-pooling and mutual guarantee between participants, avoiding issues like riba (interest), gharar (uncertainty), and maisir (gambling) that are present in conventional insurance. It describes the key concept of tabarru in takaful, where participants donate contributions to a common fund to mutually insure one another. If the fund faces a deficit, the operator can provide an interest-free loan (qard hassan) to ensure solvency, though the terms of repayment are sometimes unclear.
The document discusses Takaful, which is an Islamic form of insurance that complies with Sharia law. It explains that conventional insurance contains elements like interest (riba), gambling (maisir), and uncertainty (gharar) that are forbidden in Islam. Takaful was developed as an alternative based on mutual assistance and joint guarantee between policyholders. It uses models like Mudarabah, where profits and losses are shared, and Wakalah, where the Takaful company manages the fund for a fee. The key features of Takaful are that policyholders own the contributions pool rather than the company, and any surplus is distributed back to policyholders.
Insurance is a contract where an individual or entity receives financial protection from losses in exchange for paying premiums. Companies pool risks to make premiums affordable. There are two main types of insurance - life insurance which pays out a sum when a person dies, and non-life insurance which covers other losses or liabilities. Within these are various products like health, property, vehicle and travel insurance. Regulations ensure customer protection and industry growth.
The document provides an overview of the fundamentals of Takaful, which is an Islamic insurance system based on mutual cooperation and donation. It discusses the key principles of Takaful, including tabarru' (donation), ta'awun (mutual cooperation), and mudharabah (profit-sharing). The three elements typically found in conventional insurance that are not compliant with Islamic law - gharar (uncertainty), maisir (gambling) and riba (interest) - are also examined. The document then outlines the basic Takaful operating models used in practice and the legal/regulatory framework governing the Takaful industry in Malaysia.
This document provides an overview of insurance, including:
1. Insurance protects against economic losses by spreading risk across many policyholders who pay premiums into a common fund. It aims to ensure continuity of financial benefits when losses occur.
2. Insurance provides security, supports pensions and savings/investments, acts as collateral for loans, and offers tax benefits.
3. Insurance evaluates and prices risks, shares risks collectively, prevents losses by encouraging safety, and allows larger risks to be covered with smaller capital investments.
Stress management project report @ icici bank Babasab Patil
This document provides a table of contents for a report on consumer behavior towards insurance products with ICICI Prudential as a case study. The executive summary introduces the topics to be covered, including the need for insurance, company profile of ICICI Prudential, vision and products offered, stress management, findings and suggestions. The introduction section provides background on life insurance including its origin and development in India. It outlines the key regulations established by the Insurance Regulatory and Development Authority.
Takaful, or Islamic insurance, is a cooperative scheme where participants pay contributions into a common risk pool. It is based on the principles of mutual assistance and donation rather than risk transfer. Takaful aims to avoid issues like riba (interest), gharar (uncertainty), and maisir (gambling) that are prohibited in Islam. General takaful contracts involve participants making donations to cover fellow participants' losses. The takaful operator manages the fund and provides assistance if it becomes insolvent. Takaful differs from conventional insurance by being based on cooperation instead of commercial exchange and by investing contributions in sharia-compliant ways.
Takaful is an Islamic alternative to conventional insurance based on mutual assistance and contribution to a common fund. There are various models of takaful including mudarabah, wakalah, and hybrid models. Main products include general takaful for assets and family takaful for life events. Any surplus from contributions after claims and expenses are distributed according to Shariah principles or used to cover deficits according to predetermined options.
This document summarizes the key differences between conventional insurance and Islamic insurance (takaful). Takaful is based on risk-pooling and mutual protection among policyholders, rather than risk transfer from policyholders to insurers. It avoids elements of riba (interest), gharar (uncertainty), and maisir (gambling) through a cooperative donation scheme where participants contribute to a common fund to make payouts to those affected by losses. While based on tabarru (donation), takaful also provides participants rights to claim compensation, so it is considered a qualified rather than pure tabarru contract.
The document discusses Takaful, the Islamic alternative to conventional insurance. It begins with an introduction to Takaful and the differences between Takaful and conventional insurance. It then covers the history and evolution of Takaful over time, the different types of Takaful coverage, and Takaful models used worldwide. The document also addresses the target market for Takaful, challenges facing the Takaful industry, and prospects for growth in Turkey. It concludes with a discussion of operational aspects of the Takaful model and challenges that still need to be addressed.
Topic vi. islamic insurance takaful (7 files merged)SaudBilal1
This document provides an overview of Islamic insurance (takaful) and its basic concepts. It discusses the key features of takaful including cooperative risk sharing, clear financial segregation, and Shariah-compliant policies and strategies. The major differences between takaful and conventional insurance are explained relating to the parties to the contract, payment of premiums, and investment of insurance funds. Various takaful models are outlined including mudarabah, wakalah, hybrid, and waqf models. Finally, the document describes the main takaful products of general and family takaful and discusses underwriting surplus, technical provisions, and how to address deficits in participants' risk funds.
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Prescriptive analytics BA4206 Anna University PPTFreelance
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But wait. What happens when you fully integrate your WhatsApp campaigns with HubSpot?
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Profiles of Iconic Fashion Personalities.pdfTTop Threads
The fashion industry is dynamic and ever-changing, continuously sculpted by trailblazing visionaries who challenge norms and redefine beauty. This document delves into the profiles of some of the most iconic fashion personalities whose impact has left a lasting impression on the industry. From timeless designers to modern-day influencers, each individual has uniquely woven their thread into the rich fabric of fashion history, contributing to its ongoing evolution.
2. ● Takaful started some 30 years ago in the Middle East with the launching of two
companies in 1979:
○ The Islamic Arab Insurance Co. (IAIC) in the UAE and
○ The Islamic Insurance Co. of Sudan
● But it took some time for the movement to take shape.
● Later in 1984, Malaysia played a pioneering role in setting the first Legal framework
specific to Takaful (Takaful Act Malaysia).
● This was instrumental in the successful launching of the Takaful movement in Malaysia
and in other countries of South East Asia.
1. Ottoman Empire- First introduce western concept of insurance- Maritime Code 1863.
2. Ottoman Law of Insurance 1874-only life insurance is haram or unlawful.
3. Since then, western concept of insurance is practiced almost in all countries in the world
HISTORICAL BACKGROUND OF
WESTERN CONCEPT OF INSURANCE
3. • Risk and uncertainty are fundamental facts of
life. All human activities are subject to risk, which
may lead to financial or physical losses to him.
Insurance is a device to cover the losses arise due to
occurrence of some undesired event.
Risk And Insurance:
4. Insurance is an economic device
whereby the individual substitutes a small
certain cost (premium) for a large uncertain
financial loss (the contingency insured against)
that would exist if it were not for the insurance.
Definition of Insurance
5. By Type of Products
i) Life insurance
ii) General insurance
iii) Liability insurance
CLASSIFICATION OF INSURANCE
BUSINESS
6. Nature of Insurance Contract
• Aleatory Contract
• Unilateral Contract
• Conditional Contract
• Contract of Adhesion
7. Definition of Tkawful
DEFINITION
Takaful, also called Islamic insurance, is a system of cooperative insurance for
followers of Islam. Members of a tkawful contract contribute to a pool of money that’s
used to financially support a member when they experience a covered loss.
The concept of tkawful originates from the beginning of Islam. Community members
used social insurance practices to pool resources and help cover losses.
The takawful system is based on Sharia, or Islamic religious law, which is the code of
conduct and religious guidelines for Muslims. Specifically, takaful follows Islamic
principles including welfare, shared responsibility, and cooperation.
Alternate name: Islamic insurance
8. Unlike conventional insurance, participants in a takaful contract are both the
insurers and the insured. Each member of the takaful group agrees to make
regular contributions or premiums. The money is put into individual
accounts and invested in Sharia-compliant investments. Part of joining the
takaful contract is agreeing to donate a portion of the funds from your
account if another member faces a loss. Likewise, your co-members agree
to help cover you if you face losses.1
In practice, takaful can look a lot like conventional insurance. For example,
say you protect your home with property takaful. A storm causes damage
to your home and leaves it uninhabitable.
How Does Takaful Work?
9. It may seem like takaful is the same as conventional insurance, such as car
insurance or homeowners coverage. However, a takaful agreement is Sharia-compliant, while
conventional insurance is not. Conventional insurance violates three specific concepts in
Sharia: gharar, maysir, and riba.
Gharar: This is the concept of uncertainty, risk, or fraud in financial and business transactions.
Under conventional insurance, you pay premiums for the promise that you’re covered if you
experience a specific loss. However, you may never experience a loss or need to file a claim.
Gharar is violated because both parties are uncertain whether you’ll use your insurance product
or not.
Maysir (Maisir): Maysir, or gambling, is prohibited in Islam as wealth should derive from
productive work rather than winnings from games of chance or luck. Conventional insurance is
often considered a type of gambling in Islam because of the uncertain risk and reward of a
policy. For example, a person could only have insurance for a few months before experiencing
a loss and getting the full value of the policy. On the other hand, someone may never need to
use their policy and pay premiums for years without a benefit.
Riba: Meaning “interest” or “usury,” riba is prohibited in contracts by Islamic religious law.
Many conventional insurance companies invest premiums into bonds and funds that bear
interest, which violates guidelines against riba.
10. Conventional insurance policies consist of policyholders and the
insurance company. The policyholders pay the insurance company to
insure them against risk. In takaful, however, the contract participants are
both the insurer and the insured. To manage the takaful contract and
coverage, several models of contracts are used:
1. Wakalah (agency)
2. Mudharabah (profit-sharing)
3. Hybrid Model
Types of Takaful
11. Types of Takaful Explanation
Wakalah
This model works by the Islamic insurance company, or takaful operator, becoming an agent for the takaful contract.
The agent manages the funds for participants. Participants pay the agent a fee for their services.
Mudharabah
While wakalah contracts are fee-based, mudharabah contracts are a profit-sharing venture between takaful participants
and the contract manager. The takaful participants provide capital in the form of their premium payments. The
manager of the contract provides expertise and managerial skills to invest the participants’ money into Sharia-
compliant investments.
Profit made by the investments is shared among the participants and the manager at an agreed-upon rate. The shared
profit pays for the manager’s time and experience rather than a straight fee. The manager doesn’t receive
compensation if the investments don’t make a profit.
Hybrid Model
The mixed, or hybrid, model of takaful combines elements of both wakalah and mudharabah. In this model, the takaful
manager receives a set wakalah fee as well as a portion of any profits from takaful fund investments.
12. Takaful vs. Conventional Insurance
Takaful Conventional Insurance
• Risk is shared between participants. • Risk is transferred to the insurance company.
• Any investments must be compliant with Sharia law. • Investments do not need to meet religious standards.
• Profits from fund investments are returned to takaful
participants.
• Profits of the insurance company may be distributed
to third-party shareholders, who may or may not be
policyholders.
13. Models Of Tkawful
Mudarabah Model, Family Takaful
Company’s Admin
& Manag. Expenses
Profit Attributed
To Shareholders
PA
PSA
FTF
Investment Profit
PA
PSA
Company
Takaful Contract
based on Mudarabah
30%
70%
Payment from
PA
Payment from
PSA
16. ● The participants’ risk fund’s financial outturn from the risk element of its
business, being the balance after deducting expenses and claims (including
any movement in provisions for outstanding claims) from the contribution
income and adding the investment return (income and gains on investment
assets).
● AAOIFI (2010), in its Financial Accounting Standards No. 13 on Disclosure
of Bases for Determining and Allocating Surplus or Deficit in Islamic
Insurance Companies made reference to underwriting surplus as: The excess
of the total contributions paid by policyholders during a financial period
over the total indemnities paid in respect of claims incurred during the
period, net of reinsurance and after deducting expenses and charges in
technical provision.
ISLAMIC INSURANCE (TAKAFUL): UNDERWRITING
SURPLUS (DEFICIT) OF TABARRU’ FUND IN INDONESIA
17. ● In this paper, the author choose gross contribution, reinsurance, claims payment and
net investment income as factors that influence underwriting surplus. Contribution
(premium) is participant’s liability to provide some funds to insurance company based
on agreement in the contract.
● So gross contribution means pure contribution paid by the participant before
deducting expenses. In takaful, contribution is made in the spirit of tabarru (donation),
with the condition that the participant agrees that his contribution can be used to help
each other participant within the takaful program.
● Reinsurance is insurance for insurer. It is a form of insurance whereby a risk that
already insured is insured again by the insurance company (Hansell, 1999).
Reinsurance of takaful business under Islamic principle is known as retakaful.
● As the connection to underwriting surplus, Sula (2004: 265) stated that reinsurance
can enhance the underwriting result and financial condition of the insurance company.
So reinsurance positively influence underwriting surplus.
Underwriting Surplus’ Factors and their Connection
18. ● Reinsurance is also known as insurance for insurers or stop-loss insurance. Reinsurance is the
practice whereby insurers transfer portions of their risk portfolios to other parties by some
form of agreement to reduce the likelihood of paying a large obligation resulting from
an insurance claim.
● The party that diversifies its insurance portfolio is known as the ceding party. The party that
accepts a portion of the potential obligation in exchange for a share of the insurance premium
is known as the reinsurer.
● How Reinsurance Works
● Reinsurance allows insurers to remain solvent by recovering some or all amounts paid to
claimants. Reinsurance reduces the net liability on individual risks and catastrophe protection
from large or multiple losses. The practice also provides ceding companies, those that seek
reinsurance, the capacity to increase their underwriting capabilities in terms of the number
and size of risks.
● According to the Insurance Information Institute, Hurricane Andrew caused $15.5 billion in
damage in Florida in 1992, causing seven U.S. insurance companies to become insolvent.
What Is Reinsurance?
19. • Reports that the term “retakaful” was coined by the takaful and insurance fraternity in
their efforts to Islamicise or Arabicise terminology for components of the industry’s
sharia-compliant supply chain. Just as reinsurance refers to the concept of “insurance for
insurance companies,” retakaful refers to “takaful for takaful companies.”
Elements of sharia compliance are the main factors differentiating between a retakaful
and a conventional reinsurance operation, because sharia advocacy should remain
paramount among industry stakeholders ahead of commercial returns. Islamic financial
institutions must seek to enhance knowledge of Islamic finance so as to stimulate a
proper approach to the enhancement and development of products and services.
A lack of such knowledge stunts the intellectual and operational development of the
industry, as some sharia issues could be side-stepped, leading practitioners to fall back to
conventional practices detrimental to the future of retakaful or Islamic finance and
economics.
Reference: Mahbob, I. (2012). Retakaful. In Takaful and Mutual Insurance (pp. 175-
190). The World Bank. https://doi.org/doi:10.1596/9780821397244_CH12
10.1596/9780821397244_CH12
Retkaful