Takaful
Insurance model compliant with Islamic finance principles, based on mutual pooling and risk sharing.
Takaful is an insurance model compliant with Islamic finance principles, which prohibit interest, excessive uncertainty and speculation deemed, under this interpretation, present in conventional insurance. It rests on a pooling principle: participants pay contributions into a common fund intended to indemnify those who suffer a loss, the takaful operator managing this fund in exchange for remuneration defined under precise models. Surpluses can be redistributed to participants rather than captured as profit. The fund's investments must respect compliance requirements, excluding certain sectors and instruments. Takaful is growing strongly in Muslim-majority countries and among populations seeking products consistent with their convictions, in Southeast Asia, the Middle East and Africa. For international insurers, it constitutes a segment for accessing dynamic emerging markets, requiring adaptation of legal structures and dedicated compliance governance.
Textbook case: a takaful operator manages a common fund fed by participants' contributions, whose surpluses can be redistributed to them rather than retained as profit.
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