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industry in these three countries is largely governed by conventional laws. Shari'ah framework
and matters are left to the discretion of individual insurance and Islamic finance institutions. It
would take some time for these countries to institute comprehensive Shari'ah framework for
Takaful.
Some of the major challenges facing the Takaful industry especially in the three out of the four
countries selected for this study are: the absence of a comprehensive Shari'ah governance
framework for Takaful, lack of Takaful Shari'ah standards, conflict between the existing legal
framework and Shari'ah requirements, and absence of Shari'ah conflict resolutions. For
example, there exist numerous conflicts between the Shari'ah principles and domestic laws.
There are cases involving Islamic contracts claimed to be non-Shari'ah compliant due to
ambiguous clauses.
8.3. Products and Services
Product development, innovation, new business models and quality of operations play positive
roles in the growth of the Takaful industry. Takaful companies must continue to invest in
research and product development. They need to be innovative and strategize for sustainability.
TABLE 24: P RODUCT AND SERVICES ISSUES AND POLICY RECOMMENDATIONS
No Issues Policy Recommendation Country Affected
3 3.1. Lack of innovation and
use of technology
Developing unique and
original products
UK, Turkey and Saudi
Arabia
Investing in technology UK, Turkey and Saudi
Arabia
3.2. Lack of customer
awareness
Awareness campaign among
the public and in schools
and colleges
Applies to all the four
countries
3.3. Weak market
penetration and
distribution channels
Promote the use of
technology particularly
InsurTech, and mobile apps
for micro-Takaful
UK, Turkey and Saudi
Arabia
Diversify products to
include trade insurance
Applies to all the four
countries
Offer more Re-Takaful
businesses
Applies to all the four
countries
Source: Authors
A good business model and product must be competitive, cost-effective and appealing to
consumers. Takaful companies must not continue to mimic the marketing strategy being
adopted by the conventional insurance. Instead they must innovate original products and
services. The constant change in customers’ taste and demands requires Takaful companies to