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6.5.2. Analysis of the Interview Results
This section analyses and discusses the results of the interviews conducted with 12 Takaful
experts from the three countries included in the study: Malaysia [6 experts], Turkey [3 experts]
and Saudi Arabia [3 experts]. The twelve experts were asked 10 questions each. The following
responses obtained are vital to the development of the Takaful industry and complement issues
not covered in the survey results discussed above.
1. How do the macroeconomic environment, political uncertainty and market
confidence influence the Takaful industry and what are the countermeasures that
need to be taken?
The twelve experts interviewed are unanimous in their views that bad macroeconomic
situations coupled with political uncertainties and low market confidence negatively
impact consumers’ demand for Takaful products but investors in such situations will
purchase Takaful to cover their position. In contrast, good microeconomic environment
means high GNP level, high savings and a high potential for Takaful. They also believe
that political risk can increase the sale of some insurance products although with some
extra cost; andwell-organized intermediaries, logical price, transparency and disclosure
affect the Takaful sector positively. Furthermore, they believe that the prospects for
growth of Takaful sector across markets and regions remain positive, given the series of
regulatory initiatives that have been introduced to drive the sector’s growth and boost
its attractiveness. Experts from Malaysia opine that the good regulatory framework in
the country is able to develop confidence in the industry and make consumers feel well
protected. Meanwhile experts from Turkey are of the view that Islamic insurance is
influenced by trust, which is one of the most important emotional factors rather than
real factors.
In order to enhance the resilience of the Takaful industry under challenging
macroeconomic environment, political uncertainty and market confidence, the experts
suggest the following measures. Firstly, a combination of fiscal and regulatory
measures, including tax incentives, the growth of private-sector employment,
development of innovative products and distribution strategies to increase the
acceptance of and demand for Family Takaful products around the globe especially in
regions with low Family Takaful penetration and relatively small contributions to the
total Takaful business. This suggestion is based on the fact that of recent the rapid
growth recorded in Family Takaful for certain jurisdictions is largely fueled by the
introduction of products such as bancassurance and tax credits for investments in
Family Takaful . The experts also suggest that careful attention be given to the following
areas: transparency, disclosure, taxation law, solvency, capital adequacy requirements,
the credibility of assets in which funds are invested and liquidity ratio.