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Takaful is a system based on mutual assistance which was approved by the Islamic Fiqh Council in 1985 as a Shari'a compliant alternative to conventional insurance. Commercial insurance is considered unlawful because it involves prohibited elements including maisir (gambling), riba (interest) and gharar (uncertainty).

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The Library provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact library@icaew.com.

Takaful - Islamic insurance

Mastering Islamic Finance is a practical and accessible guide to Islamic finance that helps demystify the differences with conventional banking, enabling practitioners to develop Sharia compliant products for customers. Chapter 8 on Takaful covers the Sharia perspective on conventional insurance, the Islamic alternative (takaful), takaful models, types of takaful policy and the future of the takaful industry (pages 147-159).

Takaful: An alternative to conventional insurance

In Understanding Islamic Finance Muhammad Ayub of the Institute of Islamic Banking and Insurance (IIBI) introduces all the major products and processes associated with Islamic finance. Chapter 16 focuses on Islamic insurance and sets out the need for takaful cover, explains why conventional insurance is prohibited and provides an explanation of how the takaful system works in practice.

Islamic Financial Institutions

'Islamic finance: law, economics, and practice' is a qualitative overview of the practice of Islamic finance. Chapter 8 focuses on Islamic financial institutions, with a discussion of how Islamic versions of commercial banks, insurance companies (Takaful) and venture capital and private equity firms have evolved.

Terms of use: You are permitted to access, download, copy, or print out content from eBooks for your own research or study only, subject to the terms of use set by our suppliers and any restrictions imposed by individual publishers. Please see individual supplier pages for full terms of use.

The market for Takaful

The number of Islamic insurance operators worldwide is gradually increasing but adoption of Takaful is still at an early stage with many commentators observing that it has not yet fulfilled its potential to replace conventional insurance in the leading Islamic finance markets.

Global Takaful report 2017: Market trends in family and general Takaful
This report by actuarial firm Milliman examines the growth of the global and family Takaful markets for 2012 to 2015, analysing financial trends, market penetration rates, and the various opportunities and challenges that lie ahead for the industry. The firm has also produced a paper on Implementing IFRS 17 for Takaful companies, published December 2018.

Global trends in Islamic finance and the UK market 2019
TheCityUK publishes a regular Islamic finance research report which summarises global trends in Islamic finance, with particular reference to how the market - including the Takaful market - is developing in the UK. The most recent report was published in April 2019.

Islamic Finance Outlook 2021
Annual S&P Global Ratings research report predicting trends that will shape the industry's growth, with a section on the Islamic insurance sector. 

Islamic Finance News: IFN Annual Guide 2020
This annual IFN journal guide looks at overall markets for Islamic finance, along with articles on Takaful in Asia and Europe and individual country market reports. Requires an IFN subscription to access. 

Islamic Financial Services Industry Stability Report 2020
Annual industry report by the Islamic Financial Services Board (IFSB). Provides updates on trends, market growth and developments in the Islamic financial services industry, including Takaful. Requires free registration to access. 

Multimedia and video

Essentials of Takaful
In this Institute of Islamic Banking and Insurance (IIBI) 2012 video Islamic finance expert Iqbal Asaria provides a short introduction to the essentials of Takaful. Running time, 17:19 minutes.

Takaful - A Discussion
A 2017 IIBI video in which industry experts Iqbal Asaria and Dawood Taylor discuss the origin and concept of Takaful and building capacity in the re-Takaful market. Running time, 22.33 minutes.

Useful links

Institute of Islamic Banking and Insurance
The Institute of Islamic Banking and Insurance (IIBI) publishes the quarterly magazine NewHorizon, which provides coverage of new developments in Islamic finance and Takaful.

Islamic Financial Services Board (IFSB)
The IFSB issues global standards for the Islamic finance industry, including standards for takaful and retakaful (reinsurance) undertakings and accompanying FAQs for the standards.

Islamic Insurance Association of London (IIAL)
Industry body launched in 2015 to support UK insurance markets transacting Islamic finance. 

Middle East Insurance Review
The Middle East Insurance Review takes a regular look at the latest developments in the Takaful market, including regulatory changes in the Middle East and Asia which have the potential to alter the Takaful landscape.

Further reading

The library provides access to a range of online articles from leading business and finance journals on takaful, supplemented by a collection of articles and books that can be obtained through the library's enquiry service.

Online articles

Access to full text articles is provided for ICAEW members, ACA students and other entitled users subject to the conditions listed in the terms of use statement.

Takaful to lead the way in sustainability

The coronavirus pandemic has accelerated a shift towards a more 'values based' approach in the Malaysian takaful sector. A new values-based intermediation for takaful (VIBT) initiative is due to be launched in July 2021.

Charting a sustainable path forward

Against the backdrop of the Covid-19 pandemic, the UAE takaful market will have to adapt effectively to changes in demand, competition, regulations and technology in order to thrive. Cynthia Ang takes a look at the market's main drivers and trends, hurdles to overcome, regulatory environment and positive signs for the takaful sector.

Takaful sector resilient so far, but there are challenges on the horizon

The Takaful sector has benefited from strong earnings in 1H2020 - driven by fewer motor and medical claims - but earnings could drop in 2H2020 and 2021. Some insurers will therefore need to revisit their business models and significantly strengthen their capital buffers.

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Books in the Library collection

Mastering islamic finance : a practical guide to sharia-compliant banking, investment and insurance
F.Karbani (Pearson Education, 2015, 191 pages)
A practical guide to provide practitioners with an understanding of the key concepts underpinning Islamic finance and the prevalent and developing market practices. It also explains the main products and service types and how they differ from comparable conventional finance instruments. Includes a chapter on takaful. 

To find out how you can borrow books from the Library please see our guide to book loans.

You can obtain copies of articles or extracts of books and reports by post or email through our document supply service.

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