There is a proliferation of Takaful operators in the major markets like Malaysia, Pakistan, Kuwait and Saudi Arabia today. Although competition between the different providers is growing there will only be a few providers who will be successful in differentiating themselves and attaining a scalable business model. Presently the Takaful industry needs to raise the bar of product and service excellence and level the playing field with conventional insurance suppliers. It also needs to attract, recruit, motivate, develop and retain quality professionals within this fast-growing industry. Going forward product design and innovation, customer convenience, brand recognition, enlightened use of E-commerce and unrivalled service standards are key to guarantee long-term success. The Takaful operators need to become the first choice in their domestic market and replicate their success in international markets. The development and management of multi-channel distribution is important as well as gaining market share of defined customer segments e.g. corporates, financial institutions, retail, affluent and private customers. Each customer segment requires a carefully customized solution to meet their needs. The Takaful industry is well poised to develop its competitive edge and expand internationally. Competition is the adrenalin to maintaining momentum, sharp customer focus and managing change effectively.
SOHAIL JAFFER
Two salient tasks have to be completed in order to secure a long-term success for the Takaful industry: Firstly, although Muslim scholars have clarified how the alternative to the Commercial Insurance Contract must be developed, this effort solved one facet of the problem; however, there remain some problems relating to commercial issues. In fact, the challenge for the Takaful operators hinges on the fact that they cannot price the Takaful products competitively in the market, which might impact negatively on the whole industry as compared to conventional insurance, because the range of investment sectors in which the operator can invest is restricted due to the Shariah rulings, and, therefore, there is a lack of high-yielding investment opportunities. Moreover, the spread of awareness on Islamic economics is insufficient to solve the aforementioned problem as the existence of competitive premium prices is an essential factor in the success (or otherwise) of the Takaful industry. Hence, the launching of Islamic Capital Markets encompassing myriad companies with a variety of Shariah compliant activities might be extremely helpful in the success of the industry. Secondly, it is proved that the establishment of the Takaful system was not readily accomplished. In fact, Takaful came into existence as a result of approximately a century of debate among Muslim scholars around the Muslim world, and, more importantly, some significant alterations (i.e. the operation of the concept of donation) have been brought to the existing Islamic system after it has been implemented in practice. Thus, one should assert that the system requires continuous monitoring and control in order to ensure both the compatibility with the Shariah and, subsequently, certain credibility before the public. SAMI MATRAJI LLM
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