gif Career A
s the Islamic fi- nancial industry is thriving and be- coming an emerg- ing sector in glob- al finance, the opportunities for individuals want- ing to tap into the Takaful Insurance
are expanding. Firstly when planning your career in Islamic insurance it is important to familiarise yourself with some key as- pects such as; what is Takaful? What are the principles and how is Takaful utilised in businesses in comparison to conven- tional insurance methods? It is also recom- mended to examine which type of sector of Islamic insurance you would be best suited in as Takaful covers a range of industries such as health, motor vehicles and family. If you have been contemplating the idea of utilising your talents and skills in the Taka- ful Islamic Insurance sector this definitive article can help you plan out your career moves and further enhance your knowl- edge on the lucrative sector.
Overview of Takaful Insurance Takaful means “guaranteeing each other” and is based on the principles of “Ta’awun” (mutual co-operation) and “Tabaru’a” (dona- tion), where a group of Takaful Participants (policyholders) agree between themselves to share the risk of a potential loss to any of them, by making a donation of all or part of their Takaful Contribution (premium) to the Takaful Fund. The fund then will compen- sate the Participants for any loss.
The Takaful Fund is invested strictly in Halal activities under non-interest bearing condi- tions in order to maximise the fund value. All Takaful Contracts are managed by an appointed agent, who provides all the nec- essary marketing, operational facilities and administration required to service the Taka- ful Fund and the Takaful Contracts.
Takaful sectors which you could specialise in involve the following sectors of:
• Medical Health Insurance • Family Insurance
• Child Education Insurance • Personal Accident Insurance • Investment Insurance • Travel Insurance • Marine Insurance • Fire and Accident Insurance • Engineering Insurance • Motor and Vehicle Insurance
There may be other sectors which each indi- vidual company may offer as a form of insur- ance but the above listed industries are the main sectors covered under Shariah com-
56 Global Islamic Finance October 2010
pliant insurance. Perhaps you have some medical or health related experience which gives you an upper hand on medical termi- nology and wish to dwell into Takaful Medi- cal insurance. You may have had experience in the Travel industry and are used to offer- ing conventional travel insurance but you can further expand your skills into Takaful insurance. Whatever your niche is you can utilise your specialist area of knowledge into a career in Takaful.
The very first Takaful company was estab- lished in 1979 which was the Islamic Insur- ance Company of Sudan. Today in 2010 there are 28 registered Takaful companies worldwide writing takaful directly and 10 more as Islamic windows or marketing agen- cies placing insurance risk with conventional and takaful companies and the number is continuing to grow.
In fact the number of takaful companies is higher as all insurance companies in Sudan are deemed to operate in accordance to the Shariah principles. In addition, new takaful companies have been established recently in Sri Lanka and Tunisia.
At least four more Takaful companies are under formation in the Middle East in coun- tries such as Kuwait, UAE and Egypt. Several other Takaful companies are being contem- plated in various countries such as Paki- stan, Australia and Lebanon. The countries of South Africa, Nigeria, and some of the for- mer states of the Soviet Union are also con- templating tapping into the Takaful market.
What makes Takaful Insurance differ-
ent from conventional insurance? In conventional insurance the risk is entirely transferred from the policyholder to the in- surance company upon payment of a pre- mium.
In return for paying the premium the policy- holder gets peace of mind and in the event of a valid claim, the claim is settled. This brings elements of uncertainty and, in the view of Muslims, gambling, into the contract as one of the two parties will make a loss, especially the policyholder if no claim occurs.
Takaful is a structure, the first element of Takaful appeared in the 7th Century in which the risk is shared between all participants removing the elements of uncertainty and gambling from the contract.
Takaful insurance follows the principles of Shariah and insurance should only be covered under Halal methods of wealth management. By eliminating all of the ele- ments prohibited by Shariah and structuring agreements in a compliant manner, Takaful provides a Shariah compliant and ethical in-
surance solution that makes it appealing to Muslims and non-Muslims alike. The table above shows the Islamic Takaful insurance methods in comparison to conventional in- surance methods. As you can see there are many key differences such as the structure as the organisation principle is different and in conventional insurance only participants will benefit.
The main difference between Takaful insur- ance and conventional insurance as indi- cated in the table is that the laws are com- pletely different.
Takaful insurance’ main basis is derived from the Shariah principles whereas conventional insurance brokers use secular regulations. In addressing these key issues you can give yourself thorough insight into a career in Takaful and further pave the way for a thriv- ing profession in the Takaful industry.
Try to familiarise yourself with the key differ- ences so that if you do obtain an interview with a Takaful company you can express your knowledge and understanding of the concepts of Takaful and further help to give yourself a better chance of getting that longed for job.
It is important to be accustomed to the ba- sic principles and sectors of Takaful Islamic insurance so that you can begin to pave the way for your new career in the growing in- dustry.
It also gives you an advantage over other competitors who are seeking a job in the Takaful sector. It is becoming a highly com- petitive market and knowledge of the key principles can help you in understanding the system comprehensively and increasing your chances of getting the career which you desire in the Takaful industry.
The principles of Takaful are as follows:
• Policyholders must co-operate among themselves for their own good. • Every policyholder must pay a sub- scription to help those that need assis- tance. • Losses are divided and liabilities spread according to the community pooling system. • Uncertainty is eliminated in respect of subscription and compensation. • It does not derive advantage at the cost of others.
Theoretically, Takaful is perceived as co- operative or mutual insurance, where mem- bers contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of “bear ye one another’s burden.”. Commer-
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