While Muslims make up over 1 billion of the world's population, relatively little has been done to harness the economic potential of this section of the world's population. While many countries in the developed world face up to the... more
While Muslims make up over 1 billion of the world's population, relatively little has been done to harness the economic potential of this section of the world's population. While many countries in the developed world face up to the prospect of an aging population, many of those countries where muslims make up the majority sports a young and financially underdeveloped population. Islam is not only about how to worship God, but is also about how to live ones life and by extension how to conduct commerce. Takaful the Islamic equivalent to conventional insurance has developed rapidly in the last 5 years after the first of such companies was established in Sudan in the seventies. This paper examines how Takaful differs from conventional insurance by looking at the underlying contract of Takaful from the eyes of an actuary. The paper then goes to describe the various Takaful models in existence in Malaysia currently and the business models behind them.
