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committed to enhancing their Takaful regulations and move towards global standards in their
Takaful practices. This has been facilitated by standards and guidelines issued by IFSB and
AAOIFI, which represent best practices. In a similar vein, several jurisdictions in emerging
markets such as West Africa and East Africa where Takaful is gradually gaining momentumhave
introduced regulatory guidelines to guide the offering of Takaful products (WTR, 2017).
However, inmost countries, the lack of Takaful regulation seems to continue into the foreseeable
future. Given this, Takaful organisations need to realise the need to address the regulatory
compliance, consumer protection and good governance practices to facilitate well-balanced
strategies for growth and sustainability.
As the Takaful industry is moving towards the ever-changing world of technology, multi-media
communication and progressive and continuous inventions, it is very important for the Takaful
players to develop the sector further in order to maintain the growth of the momentum. The
published reports and data show that Takaful is still far below its expected potential and have
not yet reached the optimal volume. TOs are too small compared by the conventional insurance
companies. Not only that, the Takaful industry must shape up with the technology to become
relevant. In order to overcome this challenge, the Takaful industry needs to fully embrace the
financial technology (FinTech). This new trend is developing at a fast pace in the conventional
insurance industry, which led to the development of the insurance technology (InsurTech)
sector. In this digital age, Takaful players need to proactively reap the technology advancement
to become relevant in the market by investing and deploying new technological solutions;
otherwise, the Takaful industry would become inefficient and obsolete. New Technology helps
opening-up new market segments that were previously unexploited, such as serving younger
generations, and lowering the cost of providing new products to the market.
Most importantly, the TOs need to ensure that their scheme is more transparent, being different
from insurance. Takaful must prove that its image of being an imitator is not right and that it is
not following or imitating conventional insurance. Takaful must offer unique services that are
highly valued and appreciated by all. Takaful industry needs to be more innovative and should
reach out beyond its niche zone. It needs to focus not only on the required products, but must
also be ahead of the expectations of its customers and deliver solutions that are genuinely
needed and highly appreciated by both individuals and businesses. It must avoid overly
complicated products and should focus on affordable, accessible and easy to understand
products and serve the public in a manner that fulfils his expectations of efficient service, fair
treatment, transparency and good governance.
From the commercial perspective, Takaful potential is massive to provide the missing link for
businesses and project infrastructure that require extensive protection. Exploiting these
prospects would require a higher Re-Takaful capacity. Given the lack of robust Re-Takaful
market, the Takaful industry must consider alternative arrangements to come together to join-
up their expertise and business needs. The essential ingredients for the Takaful industry are
already there - the presence of the world’s largest global players, and the Islamic finance system