Diversification of Islamic Financial Insturments
99
3.4.5 TAKAFUL (ISLAMIC INSURANCE) IN SUDAN
Overview of Takaful sector in Sudan
With reference to Takaful sector Sudan is the pioneer of both Takaful regulations and
developments since 1979. Sudan started Islamic Insurance in 1979 when Faisal Islamic bank
established the first Islamic Insurance Company in the world (Mohamed Abass 2012). In 1992
a new supervision law was introduced under which all companies were required to operate
according to Shariah principles (Abu Elbasher, n.d). Since Then Takaful spread to Malaysia in
1984 which has been also a pioneer in the developments of Takaful by the enactment of the
Takaful act of 1985- the first such regulatory act. The present insurance law in Sudan was
introduced in 2001 and is probably the only law which stresses on the authenticity of the
Takaful principles. In addition, the law has placed strict measures on the investment returns,
surplus distribution and commission paid for the operator.
Table 43. Key Statistics of Takaful Sector in Sudan (2013)
No. of companies Premiums* % Investments** %
General & Life Takaful 4 62 68
Non-life Takaful 9 29 28
Retakaful 2 9 4
Total 15 100 100
*Premiums are the instalments (contributions) paid by clients of Takaful companies for getting Takaful coverage.
**Investments are Takaful company’s investment portfolios in different sectors (real estate- bank deposits- shares –
sukuk) for a return.
Source: Bank of Khartoum
Takaful is consolidating its foundations in Sudan and has accomplished much over the past few
years, especially in the size of contributions. (Noor, 2015). As seen in the above table, there
are 15 Takaful and Retakaful companies in Sudan: 9 Non-life Takaful, 4 general and life Takaful
and only 2 Retakfaul companies as of 2013. 73
Main Takaful Products in Sudan
According to (Abu Elbasher, n.d), takaful companies in Sudan operate under mixed modes
namely: Wakalah and Mudarabah. The Wakalah model is used for insurance operations where
the company looks after the technical and administrative activities of technical and
administrative activities of the policy holders fund for a fee which is portion of the
contributions (actual management expenses). On the other hand, the Mudarabah mode is used
to invest the Takaful funds where the company invests the shareholders. The company invests
the shareholders fund according to Mudarabah agreement in which the company becomes the
Mudarib and the shareholders are the owners of money ( rab-almal). Profits are distributed
between shareholders and policyholders according to a certain policyholder’s agreement.
73 Note that in Sudan the whole insurance sector is based on Shariah-compliant principles, however, the terms “insurance”
and “Takaful” are used interchangeably and each insurance/Takaful company should have a Shariah committee.