Observing the tabarru' rate in a family takaful

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Citation (Scopus)

Abstract

Takaful system has a built-in mechanism to counter any over-pricing policies of the insurance companies because whatever may be the premium charged, the surplus would normally go back to the participants in proportion to their contributions. In contrast to a conventional insurance company, insurance surplus is not supposed to be a source of return for a takaful company. Any surplus that is a result of overpricing or over-charging is required to be returned back to takaful participants. Similarly, in case of under-pricing, policyholders may be asked to meet any deficit or negative difference between the policyholders' contribution and the actual claims, benefits and compensation. The objective of this study is to measure the efficacy of a family takaful contract through a simple actuarial model based on deterministic survival assumption. In addition, a linear tabarru' rate is introduced. The results show that the linear assumption on the tabarru' rate has an advantage over the flat rate as far as the risk of the prospective loss is concerned.

Original languageEnglish
Title of host publicationAIP Conference Proceedings
Pages1152-1158
Number of pages7
Volume1522
DOIs
Publication statusPublished - 2013
Event20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012 - Putrajaya
Duration: 18 Dec 201220 Dec 2012

Other

Other20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012
CityPutrajaya
Period18/12/1220/12/12

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Keywords

  • Actuarial equivalence
  • Contribution
  • Mortality
  • Mudharabah
  • Tabarru' fund

ASJC Scopus subject areas

  • Physics and Astronomy(all)

Cite this

Ismail, H. (2013). Observing the tabarru' rate in a family takaful. In AIP Conference Proceedings (Vol. 1522, pp. 1152-1158) https://doi.org/10.1063/1.4801261

Observing the tabarru' rate in a family takaful. / Ismail, Hamizun.

AIP Conference Proceedings. Vol. 1522 2013. p. 1152-1158.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Ismail, H 2013, Observing the tabarru' rate in a family takaful. in AIP Conference Proceedings. vol. 1522, pp. 1152-1158, 20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012, Putrajaya, 18/12/12. https://doi.org/10.1063/1.4801261
Ismail H. Observing the tabarru' rate in a family takaful. In AIP Conference Proceedings. Vol. 1522. 2013. p. 1152-1158 https://doi.org/10.1063/1.4801261
Ismail, Hamizun. / Observing the tabarru' rate in a family takaful. AIP Conference Proceedings. Vol. 1522 2013. pp. 1152-1158
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