Risk mitigation of sustainable finance and the effective role of takaful

• Main Authors: Hassan, Rusni, Salman, Syed Ahmed, Mohd Yusoff, Syarah Syahira
• Other Authors: Billah, Mohd. Ma'sum
• Format: Book Chapter
• Language: English; English
• Published: Routledge 2024
• Subjects: HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/115728/6/115728_Risk%20mitigation%20of%20sustainable%20finance.pdf; http://irep.iium.edu.my/115728/7/115728_Risk%20mitigation%20of%20sustainable%20finance_Scopus.pdf; http://irep.iium.edu.my/115728/
• Institution: Universiti Islam Antarabangsa Malaysia

Aligning with the global trend, Takaful operators generally play an essential role, as they prioritize the sustainability of Islamic finance in many aspects by ensuring a | sustainable economic environment (Muhmad et al., 2021). Takaful operators commit to addressing and protecting sustainability by delivering the highest quality Islamic insurance services to all its stakeholders (Mihardjo et al., 2020). They are committed to the principles of transparency and standards of institutional discipline that ensure them sustainable futures for the long term without compromising their ability for future generations to meet their own needs. Numerous features of Takaful lead to the sustainability and creativity of Takaful operators and incorporate the long-term sustainability of Islamic finance, their continuity policies, and practices. The operators of Takaful immensely focused on enhancing its awareness among their employees and customers to effectively contribute towards implementing Sustainable Development Goals in line with global Sustainable Development Goals (Ab Rahim & Amin, 2011). Takaful operators play a very pivotal role in ensuring Islamic sustainable finance, and they are also responsible for mitigating unexpected shocks and considering productive risks to generate economic opportunities. It is an attractive business because during the last few decades, they were able to build a lifelong relationship with its customers by providing them sustainable services in a more innovative, efficient, and ethical manner for enhancing its sustainability on both local and foreign Takaful market. To some extent, this theory has been used since the 1970s in Islamic financial contracts to manage the collected funds effectively and identify those factors that help contribute to its performance and ensure its sustainability. Consistent efforts are being made, like strengthening distribution channels to its customers to meet and exceed their expectations to result in the community's sustainability. No matter the scale, operators of Takaful have always been focusing on the right initiatives every year towards its outstanding performance and contribution to Islamic sustainable finance. These cultures profoundly impact their way of making a difference, where sustainability is considered very important.