ISSUES RELATING TO
THE DEVELOPMENT OF A
TAKAFUL TA'AWUNI
BUSINESS
International Takaful Conference Kuala Lumpur May 2000
Dawood Taylor AGM Takaful Ta'awuni Bank Al Jazira
1. INTRODUCTION
1.1 During the process of developing a Takaful Ta'awuni (Islamic Life Insurance) operation for Bank Al Jazira, a
number of issues were raised and considered where past practice by other takaful operators or reference to existing
takaful information or sharia decisions did not fully answer the questions raised. As such issues were quite numerous,
this document only highlights the most fundamental and basic issues where it is felt such information would be of
pertinent interest to both those operators considering entering into the takaful business as well as existing operators,
regulators and sharia advisors who may benefit from these insights.
2. TAKAFUL OPERATIONS
2.1 As simple as it may sound, a decision has to be made concerning the takaful operation that is to be developed. Is it
to be a General Takaful, Takaful Ta'awuni, or Composite Takaful operation?
2.2 Decisions relative to General Takaful may not necessarily be relevant to Takaful Ta'awuni. A good example of this
would be the sharing of surplus between different levels of risk in General Takaful e.g., motor, fire, marine etc., which
does not exist in Takaful Ta'awuni.
2.3 Past decisions of other operators relevant to one type of takaful operation may not be applicable to the other. As
General Takaful is usually written on a one year contract basis with no investment return expected (surplus is not
guaranteed) and Takaful Ta'awuni contracts are usually long term in nature and depending on the product, can have a
significant amount of investment return built in, one can foresee the applicability of policy decisions to one area of
takaful may not be relevant to another.
2.4 Certainly, a review of applicable operator, sharia and other reference material over the BAJ development period,
highlighted the need to distinguish between General Takaful and Takaful Ta'awuni operations and not to confuse
decisions for General Takaful with those required for the longer term contracts in a Takaful Ta'awuni operation.
3. TAKAFUL MODELS
3.1 Probably the area of most concern to an operator contemplating entry into the takaful business is one of an
acceptable takaful model. A comprehensive and detailed review of this area over the last year has highlighted a number
of issues and raised a number of questions that a potential operator must consider. Such issues need also to be addressed
by the takaful community in general.
3.2 The most basic issue is also potentially the most contentious and one that has caused a certain amount of division
within the takaful community. This concerns the application of a mudarabah or "profit sharing" contract to a takaful
operation and the associated issue of an operator sharing in any surplus that may be generated on a mudarabah basis.
(one must emphasize and distinguish between profit and surplus at this point)
3.3 Of importance to note is that a number of different variations of mudarabah contracts are in operation within the
takaful community at this time. Some allow the sharing of surplus with the operator some do not. Some allow the
charging of actual expenses, others a "wakalah" type fee in lieu of expenses and others still, do not allow the charging
of any type of expense to their participants fund
3.4 The first issue to arise is one of the relationship between the participants themselves. Is this a mudarabah
relationship? The answer is obviously no, as any contribution made by a participant into the "risk" pool is made on the
principle of taba'aru or donation, not mudarabah.
3.5 The application of an Islamic contract to a takaful operation therefore, is to define the relationship between the
participants and between the participants and the operator. If we consider a mudarabah contract on this basis, what
issues arise?
3.6 In principle, the fundamental issue relating to the application of a mudarabah contract to a takaful operation is
whether or not a "profit" is generated which would allow such profit to be shared, on a predetermined basis, between
the participants and the operator. Consideration of this issue and the many different models and sharia issues relating to
this subject do seem to point to the fact that the issue of surplus sharing is secondary to the applicability of a mudarabah
contract to such an arrangement.
3.7 If this is the case, why is the practice of surplus sharing and the applicability of a mudarabah contract to such
practice causing confusion and consternation within the takaful community?
3.8 The simple answer is that under a traditional mudarabah contract principle, as applied to a conventional
business/investment operation, a profit has to be generated before it can be shared and profit is not the same as surplus.
3.9 As an example, in a normal business/investment environment, consider the following;
Participant's Investment
Profit Generated
Total Gross Return
Less Operator Expenses
Total Net Return
Less Original Investment
10,000
5,000
15,000
2,000
13,000
10,000
3.10 In this example it can be clearly seen that after returning to the participants their original investment of 10,000, a
net profit generated by the investment of 3000, after expenses, can now be divided on a predetermined basis between
the participants and the operator. For example, 50/50, 60/40 or whatever division has been agreed in advance.
3.11 The problem of applying a mudarabah contract to a takaful operation arises when you consider how a takaful
operation works. For example;
Participant Contributions
Less Operator Expenses*
Less Claims
Less Reserves
Surplus
10,000
2,000
5,000
1,000
2,000
* It should be noted at this point that the charging of expenses to the participants "pool" has two schools of opinion but
in the main is practiced by most mudarabah contract model operators in one form or another e.g. actual expenses or a
"wakalah" type fee.
3.12 In a takaful operation, such a result would be viewed as positive, as in this case a surplus of 2000 equates to a
"profit" of 2000 and thus "could" be shared on a predetermined basis.
3.13 The dilemma inherent in this issue is one of the definition of profit under a mudarabah contract principle. Has a
profit been generated? If the original "investment" is 10,000 and the balance remaining of the "investment" is only
2,000, then obviously no profit has been generated on a mudarabah contract basis, as the original "investment" as such
has been depleted. Such surplus can be viewed as an "excess" of contributions paid for a service or, in other words, a
"balance" of contributions remaining after the service has been provided. As such, remaining balances of contributions
under a mudarabah contract principle should be returned to the participants in full, not shared with the operator. In a
perfect world no surplus would arise anyway, as claims would equal contributions. No profit could be generated, as
there would always be claims to pay out.
3.14 The foregoing is a rather overly simplistic explanation of how and why the issue of a mudarabah contract and
division of surplus has become somewhat divisive in the takaful community with takaful operators worldwide adopting
different approaches to resolving this issue.
3.15 Some operators apply a mudarabah contract principle to surplus sharing, including mortality and expense surplus.
Others apply a mudarabah contract approach to only the investment profits of their operation, as the investment of funds
would almost certainly generate a profit. Others still, Bank Al Jazira included, will not practice surplus sharing with the
participants but instead will allow their participants to enjoy 100% of any surplus that is generated. In Bank Al Jazira's
case, this is done by applying a Wakalah contract principle to their total takaful operation, including the investment
portion. This avoids the potential and contentious issues surrounding the fact that an operator sharing in such surplus
could in effect be "profiting" more from a build up of excess of provision for expenses over the actual expenses
incurred, rather than from the operation of takaful itself and the actual mortality surplus that may arise. This assumes, of
course, that the principle of sharing in surplus under a mudarabah contract is acceptable and on such a basis, only actual
expenses should be charged to the participants.
3.16 With regards to these issues, the questions that the takaful community and sharia advisors working with the takaful
operators need to consider and eventually answer are;
3.16.1
As a takaful operator does not create a profit in the conventional business sense but a surplus, can a
mudarabah contract be applied to such surplus utilizing what has become a popular term in the takaful
community, a "modified" mudarabah approach? In such instances potential participants are informed of
the operator's decision to share in such surplus prior to entering into a takaful contract with the operator.
3.16.2
Is the issue one of the applicability of a mudarabah contract to the practice of surplus sharing, or is the
issue more fundamental in that surplus cannot be shared at any time, regardless of the applicability of the
Islamic contract that may be utilized, mudarabah or otherwise?
3.16.3
Can surplus be shared if a different Islamic contract is applied, assuming one can be found, which would
allow such a relationship between the participants and an operator to be unequivocally accepted by the
takaful sharia community
3.16.4
Is it appropriate and applicable to allow the adoption of two Islamic contracts to a takaful operation. For
example, a wakalah contract for the takaful operation and a mudarabah contract for the investment
operation?
3.16.5
Is this potentially allowing operators to take the best from one contract and ignore those areas not
benefiting from this contract and then applying the second contract to these areas? As an example,
applying a mudarabah contract to the investment section of an operation, but a wakalah contract to the
takaful operation, allowing a fee for expenses to be charged to the takaful operation which a mudarabah
contract should or may not allow (this question is addressed later) and yet benefiting from a profit sharing
arrangement under a mudarabah contract on the investment operations which in turn a wakalah contract
would not allow?
3.16.6
If the application of two Islamic contracts to a takaful operation is allowable, then is it possible to apply
more than two Islamic contracts if such an arrangement was seen to be beneficial to a takaful operator?
3.16.7
Could the adoption of a third contract possibly be applied to the sales and marketing operation, thus
overcoming the objection of some sharia advisors to the applicability of a mudarabah contract when
charging sales agents commissions to the participants account?
3.16.8
In such cases as the foregoing, it is not clear how one can distinguish between a participant being charged
for direct sales staff salaries, which is acceptable practice under a mudarabah contract principle, even
though they such staff be dramatically under performing, and yet commissions due to agency staff, which
are directly related to their sales performance, may not be charged to the participants account?
3.16.9
It is clearly understood that although there is a contractual "divide" between the operator and an agent,
from the perspective of the participant there is very little to favor a direct sales staff employee of an
operator over a sales agent. The former is paid regardless of achieving sales; the latter is only paid when
he achieves sales. Charging the costs of the former to the participant's account but the latter to the
operator's account, as dictated by existing mudarabah rulings, seems to penalize the participant on one
hand and the operator on the other.
3.16.10
Where an operator significantly benefits a participants account by relating expenses charged to this
account, to sales income (it must be remembered that participants benefit from increased sales or
decreased sales costs, as costs are more evenly distributed), such operators should not be penalized by
having to absorb similar levels of agency sales commissions which, in the form of salaries of direct sales
staff, would normally be charged to the participants account. Without a corresponding compensatory
increase in income to the operator, which under a mudarabah contract is not possible, such an
arrangement is both unrealistic as well as grossly unfair to the operator.
3.16.11
Where the decision to not allow sales commission to be charged to the participants account is justifiable
under Islamic law, alternative arrangements must be considered by all parties concerned to allow an
acceptable alternative arrangement to be agreed, within Islamic laws, which more realistically rewards
not penalizes an operator for his efforts on behalf of the participants
3.16.11
Where the decision to not allow sales commission to be charged to the participants account is justifiable
under Islamic law, alternative arrangements must be considered by all parties concerned to allow an
acceptable alternative arrangement to be agreed, within Islamic laws, which more realistically rewards
not penalizes an operator for his efforts on behalf of the participants
3.16.13
Is it an absolute principle that regardless of the applicability of an Islamic contract to a takaful operation,
surplus generated can never be shared between a participant and an operator?
3.17 These questions and issues need to be raised and addressed by the sharia advisors involved in the development of
the takaful industry and a consensus reached which allows all operators to practice takaful in the knowledge that a
consensus does at last exist within the takaful community.
3.18 These comments and observations on the various derivatives of a takaful mudarabah model and the application of
the individual components of it to a takaful operation, do not seek to judge different takaful models in operation
worldwide which do or do not apply surplus sharing principles. The purpose of these comments is to highlight to
potential Takaful Ta'awuni operators the issues that do exist and to generate debate within the takaful community with
the sole objective to resolve what has become a divisive issue which could possibly lead to confusion and reluctance on
the part of potential takaful participants to enter into takaful contracts as well as confusing further, the Muslim
community at large.
4. SURPLUS SHARING BETWEEN PARTICIPANTS
4.1 Having considered the issues surrounding surplus sharing between participants and the operator, let us now take
a look at the issues relating to surplus sharing between participants.
4.2 In Takaful Ta'awuni, the different classes of risk are basically limited to individual or group and do not extend to
the many and varied classes of risk in General Takaful.
4.3 Assuming that 100% of the surplus generated is shared only between the participants, the question then arises of
who should share in this benefit?
4.4 No reference can be found, except for the practice of existing takaful operators, giving a clear indication or
ruling on this issue. As such, a conservative approach should be to allow all participants to share in the surplus
generated on a proportionate basis. This would apply to participants whose contracts mature, who opt for early
surrender or who may pass away in mid contract.
4.5 Technical issues do arise relative to how and when surplus is calculated and when a contract may terminate or
mature. But by allowing all participants to share proportionately in the surplus generated, this avoids potential
questioning of how and why such decisions to the contrary may have been reached. Running parallel to the saga of
economic progress is another thread, the ethical imperative of doing things in a manner that does not harm others or
violate social interests. Even though morality is a human need in the sense that man's felicity and ultimately his
survival depends on ethical conduct, in reality ethical conduct does not always obtain. Men misbehave. They act in
immoral ways, one harming other. Some violate public interest. Ultimately these end up harming themselves too.
This necessitated reminders and warnings and a reaffirmation of ethical conduct. It also necessitated arrangements
for information, its acquisition and dissemination as well as preventing its withholding where due. Prophets and
saints, philosophers and statesmen, and many ordinary men and women of strong commonsense kept reminding and
warning that economic activity must be informed by public purpose and a care for the interest of others along with
serving the interests of the actor himself. They also emphasized truthfulness, the key to information.
5. CAPITALIZATION/QARD AL HASAN AND RELATED ISSUES
5.1 Capital is required to finance expenses and to provide a safety net should claims exceed contributions. In a true
takaful operation, capital should be provided by the participants. In reality, the operator provides capital. This is a
demand of the regulators who view takaful in a somewhat similar fashion to conventional insurance. And yet the very
essence of takaful is one of mutual cooperation and sharing of risk only by the participants, unlike conventional
insurance where the risk and the risk premium is passed on to the insurance company whose profit or loss is based on
the premiums collected, less claims, reserves and expenses to run their operation.
5.2 On this particular topic, besides the two takaful models mentioned where capital could be provided by either the
participants or an operator, a third model could also exist. In such a model a government agency, charitable society or
individual(s) could donate the capital to establish a takaful operation and thus provide the impetus, on behalf of the
participants, to capitalize such a venture without the need for an operator to provide start up capital.
5.3 At present, all takaful operations in existence at this time appear to be established on a commercial basis with
capital being provided by a shareholder or group of shareholders with the intention of operating the takaful business
on sound commercial principles. It is not known of a takaful model or operation in existence at this time where the
intention is to either pay to the participants the investment proceeds of the shareholder's funds or for shareholders to
not benefit from either surplus sharing, or investment returns from the participants funds, or both. Notwithstanding the
foregoing, some operators do and have adopted a policy of not expecting a return on their investment in the formative
years of the takaful operation but it is not known of such a policy extending for an indefinite time frame.
5.4 In return for providing this capital, conventional insurance companies benefit from their ability to retain any
surplus that is generated. The provision of capital by a takaful operator to develop a takaful business on behalf of the
participants places a conventional insurance industry requirement on it, with the associated burden, and yet the
benefits enjoyed by a takaful operator for providing such enormous assistance to a start up takaful operation are
severely diluted in comparison to a conventional insurance company providing a similar level of capital.
5.5 As well as providing capital on behalf of the participants, takaful operators have adopted a policy of offering Qard
Al Hasan or "interest" free loans to a takaful operation should claims exceed contributions, especially during the
formative years when the possibility of a deficit occurring, strongly exists. 5.6 In essence, a takaful operator is being
requested to take on risk which, in a takaful operation, should be borne solely by the participants.
5.7 A number of issues arise from these situations, which require addressing.
5.7.1
There is no reason why an operator should not offer a Qard Al Hasan arrangement to a newly formed
takaful operation. He has every right to do so.As a takaful operator does not create a profit in the
conventional business sense but a surplus, can a mudarabah contract be applied to such surplus utilizing
what has become a popular term in the takaful community, a "modified" mudarabah approach? In such
instances potential participants are informed of the operator's decision to share in such surplus prior to
entering into a takaful contract with the operator.
5.7.2
There is also no reason why an operator should not provide the necessary capital to establish a takaful
operation. Again, he has every right to do so.
5.7.3
The question that arises from these two issues is one of where does an operator receive income from to
compensate for these substantial and magnanimous gestures which must be taken into consideration
when considering the viability of the takaful operation, from an operator's perspective?
5.7.4
Is it logical, under a takaful principle, to ask an operator to provide capital on behalf of the participants,
and yet deny him the opportunity to benefit from the surplus (defined earlier for this argument)
generated from the operation, which is the principle reason conventional insurance operators provide
such capital?
5.7.5 Is it also logical to ask an operator to provide, in addition to the capital and again on behalf of the
participants, a Qard Al Hasan loan if a deficit occurs? In such circumstances is the operator not actually
taking on the risk of the participants?
5.7.6
From a commercial perspective, how is this facility paid for? If directly by the operator, as a Qard Al
Hassan arrangement implicitly implies, at some point someone has to absorb the cost and consider the
financial implications of this arrangement. Is the operator actually absorbing this cost or is the very
distinct possibility of such a facility being required built into the initial costing of the takaful products
thereby transferring the cost, indirectly, to the participant?
5.7.7
How would shareholders, auditors and regulators view the possible provision of such a facility and the
financial implications it raises? Bearing in mind that a takaful operator does not retain risk on its own
behalf but only on behalf of the participants (this is a point that is not often clearly understood by parties
outside of the takaful community), what are the implications of this "underwriting risk taking" by the
operator in terms of its shareholders liability?
5.7.8
Does it make sound financial sense for an operator to receive income solely from the participant's
investment portion of a takaful operation (this is for those mudarabah models where surplus sharing is
not allowed), where such an investment return can only be generated slowly, as technical reserves are
created over a number of years?
5.7.9
Is it also reasonable to expect that the viability of the takaful operator, significantly during the formative
years, rests almost entirely on income generated from the shareholders funds (initial capital) which have
been provided on behalf of the participants, to allow the establishment of the takaful operation in the first
place?
5.7.10
Also, significantly, does not the issue of what is surplus and what is reserves, relative to an operator's
income, place a takaful operator in a position of potential conflict if on generating a surplus, and for
those models where surplus sharing is not allowed, a decision has to be made as to what percentage of
surplus is to be distributed and therefore what percentage is to be retained for technical reserves?
5.7.11
Where regulatory arrangements allow flexibility in such situations, is it not possible that participants
could be negatively affected by an operator's decision to transfer to reserves, surplus that could otherwise
have been distributed, which would then directly and positively benefit the operator in future years from
the investment returns such funds would enjoy? Should an operator be placed in such a position of
potential, if not actual, conflict, where regulatory arrangements allow for such flexibility?
5.8 Some operators see the provision of capital and the offer of Qard Al Hasan facilities as justification for their
sharing in surplus generated by the operation. If one views the need to provide such facilities to satisfy the regulatory
bodies charged with monitoring takaful operations, and in many parts of the world these are the same regulators
which also supervise the conventional insurance companies, one can see some justification in their argument.
5.9 Should not therefore more emphasis be placed on considering what a takaful operator provides on behalf of the
participants, in terms of capital and Qard Al Hasan arrangements, and therefore allow a more equitable arrangement
to exist between the participant and the operator where the question arises concerning the division of profits or
surplus?
5.10 The operator must and should receive a return on his capital investment equitable to the investment that he
makes. Many issues in the present takaful system point to an inequitable arrangement existing for the operator,
relative to the benefits he provides to the participant in terms of the provision of initial capital and Qard Al Hasan
facilities, in establishing and securing the viability of a takaful operation.
5.11 Income generated from a takaful operation should be sufficient for an operator to justify the initial capital
investment he must make to establish the takaful business as well as generating future income to allow him to profit
from such a venture.
5.12 The development of Islamic financial products, to replace conventional products as the products of choice for the
Muslim community, is a major objective of the business process in developing a takaful operation. Unless the capital
behind such a venture is to be provided by the participants themselves, a charitable organization or a group of
shareholders whose declared aim is not one of profit (and with 100% of profits/surplus generated from all sources,
including shareholders funds, being returned to the participants,) then all takaful models should be operated on a
sound commercial basis, providing commensurate returns to their shareholders, relative to their initial and ongoing
investment.
6. FEE STRUCTURES AND TRANSPARENCY
6.1 Of underlying importance to the takaful community is the absolute necessity to clearly state the financial
arrangements between the participant and the operator.
6.2 Earlier issues revolved around the individual sharia advisor's interpretation of Islamic laws pertaining to a
takaful operation.
6.3 Where there can be no misunderstanding between operators or their sharia advisors, is in the area of
transparency where the financial terms, in particular the fees chargeable, are detailed for the client.
6.4 It is a view of AAOIFI that this is one of the more significant issues that need to be addressed if a set of
standards are to be established to allow participants and investors alike to be able to determine if a product is
appropriate for their needs or if a takaful company is a sound operation to invest in.
6.5 Whether a mudarabah, "modified" mudarabah, wakalah or a combination of the foregoing contracts is adopted
as a takaful model for an individual takaful operator, is an issue in itself. But of more importance is the fact that
regardless of the model adopted, transparency in declaring fees, expenses and contract conditions must be practiced.
Examples of the issues that can arise in this area are as follows;
6.5.1
If expenses can be charged to a participants account on a mudarabah contract basis, should only actual
operational expenses be charged or a fee?
6.5.2
Where a fee is charged under such a contract arrangement, are the participants being charged more than
the actual expenses and therefore not being justly treated under a mudarabah principle?
6.5.3
For those operators which adopt a mudarabah/surplus sharing model and determine their own level of
rates to the participants, (see 3.15), should any surplus generated from such operations clearly
distinguish between mortality surplus and excess of expense provision? And where such operators
adopt a mudarabah policy of charging actual expenses incurred to the participant's fund, should such
excess be returned to the participants? In effect, does a mudarabah contract allow an operator to collect
more than actual expenses incurred?
6.5.4
Should participant have clearly identified to them the individual expense areas so that opportunities to
compare and evaluate products can be made?
POOLED OR UNITIZED INVESTMENT STRATEGY
7.1 As mentioned earlier in the presentation, a Takaful Ta'awuni operator would have to make a decision on whether to
offer a pooled or unitized investment strategy to potential participants.
7.2 What needs to be borne in mind is that unlike General Takaful, where risk only products are offered and therefore
the contributions received are entirely taba'aru in nature, Takaful Ta'awuni products, in the main, consist of
contributions made up of part taba'aru and part personal investment monies.
7.3 The taba'aru portion of the contribution must be pooled to adhere to the basic principles of takaful i.e. mutual and
cooperative risk sharing. This pool does not need to be unitized as contributions to this pool are donations and there is
no need to provide individual returns to participants. Any surplus generated by the pool, including investment profits,
can be distributed in proportion to the individual contribution to the pool.
7.4 With regards to the portion of the contribution which is solely for the purpose of saving towards a particular goal
e.g. retirement, education of children, charitable donation etc., such funds are not communal in nature but are rather the
sole and exclusive property of the individual who participates in a Takaful Ta'awuni contract
7.5 The question arises as to how best to manage such funds on behalf of the participants.
7.6 One investment approach is to pool such funds and then divide any profits that may be generated in equal
proportions to the individual investments made to the pool. The participant does not suffer any inequitable disadvantage
under such an investment philosophy.
7.7 The potential disadvantage to the foregoing investment strategy is that all investors receive the same investment
advice and their monies are invested on the basis of the same investment strategy. This is the case even where the
participants vary in age and investment needs.
7.8 Another disadvantage is that if cash accounting is adopted, unrealized gains/losses cannot be distributed to members
leaving the pool.
7.9 Where a unitized investment strategy is offered to participants, this can be offered with the added opportunity for
the participant to either choose different investment funds or possibly, different investment strategies, thus allowing the
participant to create an investment strategy more appropriate to his needs.
7.10 The decision to adopt a pooled or unitized investment strategy is principally not a sharia decision but one of either
marketing policy or competitive pressures to provide one service rather than the other. Also it is possible that
regulations enacted by the local regulatory authority restrict the choice of investment strategies that can be offered to
participants.
7.11 In all cases, sharia compliant investments must of course be utilized.
9. CONCLUSIONS
9.1 As stated at the start of this presentation, it is not possible to cover all of the issues relating to the establishment
of a Takaful Ta'awuni operation within the timeframe allocated. The major issues, or at least some of them, have
been addressed in the foregoing.
9.2 A new operator in the takaful community is faced with many dilemmas, problems and issues.
9.3 To face up to these issues certain preconditions are essential to ensure success not only as a business venture,
but more importantly success as a provider of Islamic financial services to the Muslim community.
9.4 These preconditions are as follows;
9.5 Adhering to these principles and developing a takaful operation that is both sharia
compliant and fair and equitable to both the participant and the operator should result
from this dedicated approach.
9.6 On the part of governments and regulators, it is essential that assistance be
provided to would be takaful operators. Such assistance should include an
understanding of the principles underlying the mutuality of a takaful operation and
the need to not burden takaful operators with prohibitive capital requirements.
9.7 Takaful Ta'awuni, if conventional life insurance is any guide, provides the ability
to harness the vast financial potential of Muslims worldwide whilst at the same time
offering them a means to provide financial security to their loved ones in accordance
with Islamic principles. By this means their spiritual and material goals can and
should co-exist.
http://www.baj.com.sa/takaful/m4sub5.asp
Takaful Industry Statistics
A broad estimate of the total Gross Premiums Written (GPW) within the Takaful
industry in 1998 is approximately US$500m for both Life and Non-Life business, of
which around $200m pertains to Asia Pacific region. Malaysia is one of the largest
markets outside the Arab region for Takaful, writing 78% of the non-Arab takaful
business. A geographical spread of takaful business is shown below:
The growth in Takaful business had indeed been very impressive. As the following
Table illustrate, the annualized average growth since 1994 has been 92% in Family
Takaful and 34% in General. Most growth appears to be in the Family and group
Family Takaful (68% and 11% respectively) of GPW as compared to General Takaful
(4-6%). In Family Takaful the products sold were individual and Group Term as well
as savings products, mortgage policies and pension plans. In General Takaful, all
classes of commercial business were sold.
http://www.baj.com.sa/takaful/m2sub2.asp