THE PARAMETER OF PERMISSIBLE RISKS IN TAKAFUL

Over the past twenty-five years, the takaful industry has flourished as an alternative form of insurance and a viable form of financial intermediation which adds to the comprehensive financial landscape of the Islamic financial system in Malaysia. The growth in assets and contributions provides partial evidence of the significant progress achieved since its establishment in 1984. According to KFH Research, between 2005 and 2009, Malaysia’s total takaful assets expanded at a compound annual growth rate (CAGR) of 20.6% to reach USD 3.9 billion, making Malaysia the largest takaful market in Southeast Asia. The Malaysian takaful market was established over the years through a carefully planned and gradual approach. Malaysia has been developing a more comprehensive takaful framework to ensure a more resilient Islamic financial system.