Diversification of Islamic Financial Instruments
62
Figure 8: Market Share of Life Takaful and General Takaful
Source: OJK Monthly Statistic of Takaful Industry (2016)
Financial Instruments Commonly Used
In general, there are two types of Takaful products offered in Indonesian Takaful market,
namely Life Takaful and General Takaful. Life Takaful products are offered to provide services
and protection for life and family such as for education, family care, Hajj fund, travelling,
accident and others. The general Takaful provides services and protection of assets in general
purposes such as from fire, transportation, business, cars, and others. The Islamic insurance
products in Indonesian Takaful market are mainly using the following contacts: namely
contract of Tabarru’, Wakalah bil Ujrah and the contracts of Mudarabah and Mudarabah
Mushtarakah. The application of those contracts is based on the fatwa issued by National
Shariah Countil – Indonesian Council of Ulama (DSN – MUI) as the following:
 Aqd al-Tabarru42 : This contract is used in Takaful product as a basic relationship
among the Takaful participants whereby they agreed to mutually help each other
through the pool of funds generated in the Takaful. In the contract of Tabarru’ the
participants donate funds (Hibah) to be used to help other participants who are in
need. The Takaful companies will act as Fund Managers based on the contract of
Wakalah (agency).
 Aqd Wakalah bil Ujrah 43: This contract is made between the Takaful participants and
the Takaful operator whereby the participants authorize Takaful operator as the agent
( Wakil) to manage the Tabarru’ funds (or investment funds) with a specified fee
( Ujrah).
42 Fatwa DSN No.53/DSN-MUI/III/2006
43 The ‘Aqd Wakala bil Ujrah contract is based on DSN-MUI fatwa No.52/DSN-MUI/III/2006.
4,3%
5,0%
6,3%
7,0%
9,4%
2,4%
3,9%
3,2%
2,6%
3,0%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2011 2012 2013 2014 2015
Life Takaful Market Share in Conventional insurance market
General Takaful Market Share in Conventional Insurance Market