Risks and risk management in family takaful

Mohd. Zain, Nor Razinah and Bhatti, Farhad Ahmed and Salman, Syed Ahmed (2022) Risks and risk management in family takaful. Journal of Islamic Banking and Finance, 39 (3). pp. 37-54. E-ISSN 1814-8042

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Abstract

Takaful is a financial planning tool that can be used as an alternative to conventional insurance. Generally, takaful products are divided into general Takaful and family takaful. A feature of the General Takaful is that it has a short-term policy and its liability coverage is limited to material losses only. On the other hand, family takaful is a long-term policy that includes savings and an investing component. Although the tabarru fund protects them, the participants can also benefit from the investment returns and savings generated by Shariah-compliant assets. The primary objective of this article is to identify the many types of risks that Family Takaful operators in Malaysia are exposed to and their methods of dealing with and managing these risks. This article is based on a method of library research. In addition, the article highlights the difficulties faced by Family Takaful operators in Malaysia. The hazards associated with running a family takaful business are usually related to operations and investment. Non-compliance risks with Shariah laws, underwriting risks, human resource risks, and fiduciary risks are all risks that exist on the operational side of the business. These risks might occur at any point during the business process. The takaful operator may encounter market, credit, liquidity concerns, and other risks commonly associated with investment on the investment side of the equation. In addition, the researcher offered suggestions on how to mitigate these dangers.

Item Type:	Article (Journal)
Uncontrolled Keywords:	Takaful, Family Takaful, Risk and Risk Management
Subjects:	BPH Islamic Economics BPK Islamic law. Shari'ah. Fiqh K Law > K720 Property Law
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Asst. Prof Nor Razinah Mohd. Zain
Date Deposited:	05 Jan 2023 09:45
Last Modified:	05 Jan 2023 10:10
URI:	http://irep.iium.edu.my/id/eprint/102959

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