Takaful

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Takaful

An insurance structure compatible with Islamic law. According to most Muslim jurists, conventional insurance is disallowed, in part because it requires the insurer to gamble on the likelihood of an insured event's occurrence. This uncertainty is not permitted under the sharia.

Under a takaful, subscribers pay a certain amount, which is deposited into a pool of liquidity with other subscribers' contributions. Insured losses are paid out of that pool. In effect, a takaful is a mutual aid society in which the aim is not profit. However, a company may invest the pool of liquidity in sharia-compliant instruments and may keep a management fee. Takafuls have existed in one form or another for most of the history of Islam.
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DCEO Pak-Qatar General Takaful Rohail Alikhan said that Pak-Qatar General Takafuls agreement with a premier bank like Bank Alfalah for its Islamic banking portfolio is a clear recognition of its better services backed by a highly experienced management and state-of-the-art technology systems.
Summary: Strong competition, evolving regulations and a shortage of expertise continue to haunt Malaysia's young Takaful industry
Speaking to the media present at The World Takaful Conference: Asia Leaders Summit in Kuala Lumpur, David McLean, Chief Executive of the World Takaful Conference, said, "The global Takaful industry has witnessed tremendous growth in the last decade, rapidly becoming an integral part of the mainstream financial system and South East Asia, particularly Malaysia, has been the nerve centre of this dynamic and vibrant industry.
Speaking on the sidelines of the event, Brandon Bruce Sta Maria, Partner, Assurance - Insurance Leader, Ernst & Young Malaysia said, "Global Takaful contributions grew by 19 per cent to $8.
Although Malaysia still lags behind Saudi Arabia's mighty Takaful market, it certainly doesn't want for potential.
By contrast, the GCC Takaful market predominantly comprises of general Takaful business with family Takaful accounting for as little as five per cent in certain markets.
Strong competition, evolving regulations and shortage of Takaful expertise are identified as key risks in both the GCC and South East Asia.
A similar view was expressed by Zainurin Julaihi, Senior Vice President and Chief Financial Officer of Takaful Ikhlas said, "With a track record of sustained double-digit growth rates, the potential for the Takaful industry in Asia is unquestionable.
There used to be a perception that Takaful is just for Muslims, but Takaful has been established for 20 years in Malaysia and at Prudential Takaful we are seeing an increasing number of non Muslims taking up Takaful," said Arshad.
Malaysia's majority Muslim population didn't warm to Takaful in the way it warmed to Islamic banking.
The Central Bank established a programme where they opened up a six month training course in Islamic finance and Takaful for graduates.
We have twelve Takaful operators and there is a shortage in these niche areas: risk management and Shari'ah expertise.