An Analysis of Takaful: The Potential and Role in Financial Inclusion and Challenges Ahead
AbstractThis paper will look to analyze Takaful and the Takaful industry in existence today with regards to its potential for growth and the challenges associated with its development. The possibilities associated with Takaful are numerous primarily due to its widened market reach and adaptability; Takaful, unlike conventional insurance, is permissible to Muslims and non-Muslims alike providing more versatile offerings. The Takaful industry is also one of the fastest growing businesses, substantially contributing to the global insurance industry as a whole. However, despite the prospects of Takaful, the industry today faces many obstacles. Above all, the total value of the Takaful industry with regards to its combined total assets and contributions (premium) is negligible if we consider both the size of the Muslim population and the conventional insurance industry. Not to mention the challenges associated with monitoring and transparency, standardization and lack of knowledge. Therefore, this paper will analyze the economic potential and influence of the Takaful industry as well as investigate the role of Takaful in poverty alleviation, where some research has already proven successful. It will also look into the challenges faced by the industry, stalling its development and deterring it from reaching its full potential.
Kabir, H., and Lewis, M. (2007). Handbook Of Islamic Banking. 1st ed. Cheltenham, UK: Edward Elgar.
Pew Forum and the Pew Research Center (2011). The Future of The Global Muslim Population. Pew-Templeton Global Religious Futures Project. Pew Forum.
Jacky, L., Fahmi Idris, M., and Carissa, Y. (2010). History, Progress and Future Challenge Of Islamic Insurance (Takaful) In Malaysia. Proceedings from Oxford business and economics conference program.
Ey.com, (2014). EY Global Islamic Insurance Industry Insights 2013. Accessed June 18 2014. Available at: <http://www.ey.com/MY/en/Industries/Financial-Services/Insurance/EY-global-islamic-insurance-industry-insights-2013>.
The Deloitte ME Islamic Finance Knowledge Center – IFKC (2014). The Global Takaful Insurance Market: Charting the Road To Mass Markets. A Deloitte ME IFKC Practice Insights Series. Manama: Deloitte.
Bhatty, A. (2010). The Growing Importance Of Takaful Insurance. In: OECD and Bank Negara Malaysia. Proceedings from Asia Regional Seminar Kuala Lumpur, 23-24 september 2010, Malaysia.
Islamic Financial Services Board (2013). Islamic Financial Services Industry Stability Report. Jeddah: Islamic Financial Services Board.
AbdulRahman, Z. (2009). Takaful: Potential Demand and Growth. Islamic Economics, 22 (1), pp. 171-188.
Patel, S. (2005). Takaful And Poverty Alleviation. Cheshire, UK: The International Cooperative And Mutual Insurance Federation (ICMIF).
Erlbeck, A., Altuntas, M., and Berry-Stolzle, T.R. (2011). Microtakaful: Field Study Evidence and Conceptual Issues. Department Of Risk Management And Insurance, University Of Cologne.
Archer, S., Rifaat A.A.K., and Nienhaus, V. (2009). Takaful Islamic Insurance. 1st ed. Singapore: John Wiley & Sons (Asia) Ltd.
Copyright (c) 2017 European Journal of Islamic Finance
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
EJIF content is licensed under a Creative Commons Attribution 4.0 International License.
Authors keep the copyrights for their work and give the journal the work's first publication copyright, which is at the same time licensed under a Creative Commons License – Attribution, which in turn allows other parties to share the work with an acknowledgement of the work's authorship and initial publication in this journal.