The management of takaful business models in Malaysia

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Malaysia has pioneered the establishment of commercial takaful (tijari) companies since 1984 as opposed to the mutual or a pure co-operative form of takaful (ta'awuni) introduced from Sudan originally in 1979. Up until this point, the majority of takaful companies worldwide have chosen to run their operation using a tijari model rather than a mutual or pure co-operative type. This preference might be due to the difficulties and problems associated with running the mutual type as well as the promise of financial gains in operating the commercial model. Perhaps mutuality in contemporary Islamic insurance industry is merely superficial by its name (takaful) but not in essence. However, there are different business approaches or models to realizing this vision, of which at least three are implemented by takaful operators worldwide, namely: profit-sharing (mudarabah), agency model (wakalah) and hybrid model. In the field of Malaysian Islamic insurance, modified versions of mudarabah and wakalah models are implemented although the latter model seems to be favored by most takaful operators. It argues that since there are different models and principles adopted within the takaful operation (resulting from its 'commercialization'), this variation in itself gives rise to many Shari'ah issues and disagreement among scholars now noted. This preliminary study therefore sets out to highlight these issues for further research.

Original languageEnglish
Pages (from-to)561-564
Number of pages4
JournalAdvances in Natural and Applied Sciences
Volume6
Issue number4 SPL.ISS. 3
Publication statusPublished - 2012

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business management
Malaysia
Insurance
Sudan
Names
Industry
operator regions
insurance
Research
commercialization
profits and margins
Profitability
industry

Keywords

  • Business
  • Commercial
  • Malaysia
  • Management
  • Takaful

ASJC Scopus subject areas

  • Agricultural and Biological Sciences(all)
  • Biochemistry, Genetics and Molecular Biology(all)
  • Chemical Engineering(all)
  • Engineering(all)

Cite this

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title = "The management of takaful business models in Malaysia",
abstract = "Malaysia has pioneered the establishment of commercial takaful (tijari) companies since 1984 as opposed to the mutual or a pure co-operative form of takaful (ta'awuni) introduced from Sudan originally in 1979. Up until this point, the majority of takaful companies worldwide have chosen to run their operation using a tijari model rather than a mutual or pure co-operative type. This preference might be due to the difficulties and problems associated with running the mutual type as well as the promise of financial gains in operating the commercial model. Perhaps mutuality in contemporary Islamic insurance industry is merely superficial by its name (takaful) but not in essence. However, there are different business approaches or models to realizing this vision, of which at least three are implemented by takaful operators worldwide, namely: profit-sharing (mudarabah), agency model (wakalah) and hybrid model. In the field of Malaysian Islamic insurance, modified versions of mudarabah and wakalah models are implemented although the latter model seems to be favored by most takaful operators. It argues that since there are different models and principles adopted within the takaful operation (resulting from its 'commercialization'), this variation in itself gives rise to many Shari'ah issues and disagreement among scholars now noted. This preliminary study therefore sets out to highlight these issues for further research.",
keywords = "Business, Commercial, Malaysia, Management, Takaful",
author = "{Muhamat @ Kawangit}, Razaleigh and Don, {Abdul Ghafar} and {Hanin Hamjah}, Salasiah and {Md. Sham}, Fariza and Badlihisham Mohd.Nasir and Asha`Ari, {Muhamad Faisal} and Tibek, {Siti Rugayah} and Zainab Ismail and Ideris Endot and Anuar Puteh and A`Dawiyah Ismail and {Abdul Ghani}, {Mohamad Zulkifli}",
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T1 - The management of takaful business models in Malaysia

AU - Muhamat @ Kawangit, Razaleigh

AU - Don, Abdul Ghafar

AU - Hanin Hamjah, Salasiah

AU - Md. Sham, Fariza

AU - Mohd.Nasir, Badlihisham

AU - Asha`Ari, Muhamad Faisal

AU - Tibek, Siti Rugayah

AU - Ismail, Zainab

AU - Endot, Ideris

AU - Puteh, Anuar

AU - Ismail, A`Dawiyah

AU - Abdul Ghani, Mohamad Zulkifli

PY - 2012

Y1 - 2012

N2 - Malaysia has pioneered the establishment of commercial takaful (tijari) companies since 1984 as opposed to the mutual or a pure co-operative form of takaful (ta'awuni) introduced from Sudan originally in 1979. Up until this point, the majority of takaful companies worldwide have chosen to run their operation using a tijari model rather than a mutual or pure co-operative type. This preference might be due to the difficulties and problems associated with running the mutual type as well as the promise of financial gains in operating the commercial model. Perhaps mutuality in contemporary Islamic insurance industry is merely superficial by its name (takaful) but not in essence. However, there are different business approaches or models to realizing this vision, of which at least three are implemented by takaful operators worldwide, namely: profit-sharing (mudarabah), agency model (wakalah) and hybrid model. In the field of Malaysian Islamic insurance, modified versions of mudarabah and wakalah models are implemented although the latter model seems to be favored by most takaful operators. It argues that since there are different models and principles adopted within the takaful operation (resulting from its 'commercialization'), this variation in itself gives rise to many Shari'ah issues and disagreement among scholars now noted. This preliminary study therefore sets out to highlight these issues for further research.

AB - Malaysia has pioneered the establishment of commercial takaful (tijari) companies since 1984 as opposed to the mutual or a pure co-operative form of takaful (ta'awuni) introduced from Sudan originally in 1979. Up until this point, the majority of takaful companies worldwide have chosen to run their operation using a tijari model rather than a mutual or pure co-operative type. This preference might be due to the difficulties and problems associated with running the mutual type as well as the promise of financial gains in operating the commercial model. Perhaps mutuality in contemporary Islamic insurance industry is merely superficial by its name (takaful) but not in essence. However, there are different business approaches or models to realizing this vision, of which at least three are implemented by takaful operators worldwide, namely: profit-sharing (mudarabah), agency model (wakalah) and hybrid model. In the field of Malaysian Islamic insurance, modified versions of mudarabah and wakalah models are implemented although the latter model seems to be favored by most takaful operators. It argues that since there are different models and principles adopted within the takaful operation (resulting from its 'commercialization'), this variation in itself gives rise to many Shari'ah issues and disagreement among scholars now noted. This preliminary study therefore sets out to highlight these issues for further research.

KW - Business

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