Effect of Takaful Models on Performance of Takaful Operators
29 Pages Posted: 31 Dec 2019
Date Written: November 2, 2019
Abstract
Purpose of this study is to analyzethe performance in termsof profit of different takaful models being used in different countries in the world. It is both quantitative and qualitative research. In qualitativeresearch, literaturesisreviewed by using content analysis technique. Many takaful models are being used by many takaful operators i.e. Wakala, Wakal-Waqf, Mudharabah, Mudharabah-Wakla. For examining performance of different takaful modelsof five takaful operators,Secondary data on profit earning from 2008 to year 2017 istaken. Results and graphsrepresent the higher performance of Abu Dhabi National Takaful working on Mudharabah and Wakala Model which showedhigher profit as comparedtoall takaful operators.The finding of this study is essentialfor Accountingand Auditing Organization for Islamic Financial Institutions (AAOIFI)for ensuring the standardization of the services and structures that could be given within the frame of mutual help. Takaful operatorswho can also use the above modeli.e. Mudharabah and Wakala Modelfor enhancing their performancein financial market of insurance.Governmentsshould enact a law for operations and rulingsof standardized takaful modelsadopted by takaful operatorsand liberalize the takaful market via removal of tariff.
Keywords: mudharabah model, Participant Special Account (PSA), Participant Account (PA), wakala model, wakala-waqf model
JEL Classification: G1, G2
Suggested Citation: Suggested Citation