Cooperative Takaful Model: A New Game Changer [Modelo Cooperativo Takaful: Un Nuevo Cambio de Juego]

• Main Authors: Mohamed Naim, Asmadi, Isa, Mohamad Yazid, Abdul Rahim, Ahmad Khilmy
• Format: Article
• Language: English
• Published: SEK Education Group 2024
• Subjects: HG Finance
• Online Access: https://repo.uum.edu.my/id/eprint/31311/1/UBSR%2021%2080%202024%20608-631.pdf; https://repo.uum.edu.my/id/eprint/31311/; https://journals.ucjc.edu/ubr/article/view/4579
• Institution: Universiti Utara Malaysia

Though nowadays the Malaysian takaful industry is experiencing an average of two digit growth every year, it has been seen to be too commercialised and the mutually spirit which is treated as core concept of takaful has seen disappeared. On the other hand, takaful faces many critics for imposing terms and conditions that benefited takaful operators and not sufficient to cover the needs of the participants. Therefore, the study aims to analyse an alternative model to takaful industry in Malaysia using cooperative takaful model by analysing the mutuality and cooperative concepts and discussing few controversial issues related to existing takaful models. The study applies qualitative research method using documents analysis, focus group discussions and interviews. The findings propose the cooperative takaful model as an alternative to current models. The advantages of cooperative takaful model are the ability to uphold cooperative and mutuality concept and to reduce overdependence on the commercial based takaful. Besides, it offers several benefits to participants compared to the existing takaful models. By participating in cooperative takaful, the participant also became the owner of takaful company where some of monthly takaful contribution will be utilise for acquiring company’s share. However, there are some limitations of this model such as high paid up capital to set up the business, the existing legal system does not suit for cooperative takaful model, create dormant member issue, the issue of conflict of interest between management and participant as well as takaful operator concerns on the application of this new takaful model due to small market penetration