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CHAPTER 6: COUNTRY CASE STUDIES AND SURVEY ANALYSIS
Having analysed the conceptual issues and challenges in the Takaful sector as chiefly
documented in the existing literature by experts, this chapter provides case study analysis of the
Takaful sector in four jurisdictions. For this purpose, four countries, including one non-OIC
country – Malaysia, Turkey, Saudi Arabia, and the UK are selected as case studies based on
criteria explained earlier in Chapter 1. Selected countries are analysed in detail by focusing on
Takaful sector in light of the findings of the previous chapters considering the legal and
regulatory framework as well as current trends, sizes, challenges and issues. The chapter
concludes with a brief analysis of survey results on current trends on Takaful obtained from the
four jurisdictions which substantiate the case studies and provide a good prelude to the next
chapter on policy recommendations.
6.1. Case Study: Malaysia
Malaysia has firmly established supportive infrastructures required for sustainable Islamic
finance, particularly in product development, institutional establishment as well as thought
leadership. There has always been a significant support from the Malaysian government and
putting in place the right infrastructure for the Islamic finance industry to growth and prosper.
The country has attained a top spot in Islamic finance infrastructure development following the
adoption of its four-pronged strategic approaches: regulatory framework development, legal
and Shari'ah framework, products and markets development and enhancement of knowledge
and expertise.
Islamic finance, as an alternative to the conventional financing, remains beneficial and continues
to add value to the finance market and indeed the Malaysian economy in general. The Islamic
finance approach in Malaysia has been comprehensive focusing on specific outcomes. Such an
approach has significantly contributed to the exponential growth of the finance industry and to
the diversification of the Malaysian economy. Today, Malaysia stands out clear as the worldmost
matured Islamic finance operating side by side its conventional counterpart.
6.1.1. Background
The Islamic finance industry in Malaysia comprises three components: Islamic banking, Takaful
and Islamic Capital Market. The first two components (Islamic banking and Takaful) are
legislated by the Islamic Financial Services Act (IFSA) introduced on 30 June 2013 for regulating
and supervising Islamic financial institutions (IFIs) that include Islamic banks and Takaful
companies. IFSA provides regulatory framework and principles that promote financial stability
and Shari'ah compliances. IFSA also facilitates for the central bank of Malaysia (BNM) to monitor
the safety and soundness of IFIs; the proper functioning of the Islamic financial market with
integrity and orderliness; the safety, efficiency and reliability of Islamic payment systems and