45
FIGURE 6: PURE MUDARABAH MODEL
Notes: The figure presents two parties – Participants and TO. Takaful Fund and Shareholders’ Fund are both
managed by the TO. Source: Adapted from PwC (2008).
FIGURE 7: MODIFIED MUDARABAH MODEL
Notes: The figure presents two parties – Participants and TO. Takaful Fund and Shareholders’ Fund are both
managed by the TO. Source: Adapted from PwC (2008).
In contrast to pure mudarabah model, under the modified version of this model (see Figure 7),
the TO shares the underwriting surplus with the participants as an incentive for efficient
management of funds.
Participants
Surplus/Deficit
Re-Takaful
Reserves
Shari’ah-
compliant
Investments
Investment
Profits
Shareholders’
Fund
Qard Hasan
Management
Expenses
Claims
Takaful
Fund
100% - X of Investment Profits
X of Investment Profits
Contribution
Participants
Surplus/Deficit
Re-Takaful
Reserves
Shari’ah-
compliant
Investments
Investment
Profits
Shareholders’
Fund
Qard Hasan
Management
Expenses
Claims
Takaful
Fund
100% - X of Investment Profits
X of Investment Profits
Contribution