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About Us
Takaful is an Islamic system of mutual insurance built around the concept of donation. It is distinguished by its distinct nature of supporting the Islamic financial system of operation. Takaful insurance developed with the onset of Islamic banking in the 70s and the 80s, when Islamic markets all over the world, particularly in the Gulf, witnessed a surge in economic development and the emergence of new Islamic banks. With this automatically came the inherent and imminent need to insure the properties and transactions of such banks.
Faisal Islamic Bank of Sudan established the first Islamic Insurance Company called the Takaful Insurance Company in 1979. This initiative was followed by the incorporation of the Arab Islamic Insurance Company in Saudi Arabia and Al-Baraka Islamic Insurance Company. Then other Islamic and non-Islamic countries followed suit where many similar insurance companies were founded. At the outset of the nineties, Takaful Insurance was first introduced in the Gulf and the first Takaful insurance company was established in 2000.
The potential for Takaful is enormous given that insurance penetration in most Islamic countries does not exceed 1% of gross domestic product. However, many of the challenges facing Takaful operators are strategic. The concept itself is relatively new and trying to establish itself in the market. Skills and resources are being borrowed from conventional insurance markets, and a significant investment is required creating the business.
Although the Takaful market is still in a formative stage, market projections estimate the Takaful market to grow between 15% and 20% over the next 10 years, and reaching US$7.4 billion in premiums by 2015. With challenges around customer service and productivity, technology can enable this growing industry through its formative stage.
Takaful Concept
Takaful is an Islamic insurance concept based on Shariah principles whereby a group of participants mutually agree among themselves to jointly indemnify the loss or damage that may inflict upon any of them, out of the fund they donate collectively.
The overall objective of mutually sharing losses is to eliminate the element of uncertainty, emphasize social solidarity, cooperation and mutual unity among participants.
Takaful is not a new concept, it has been practiced by the Muhajirin of Mecca and the Ansar of Medina following the Hijra of the Prophet (PBUH) over 1400 years ago.
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