Diversification of Islamic Financial Insturments
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 Research and development to further develop Sukuk industries is important. Perhaps
cooperation between regulator, industry players, academia and investors is very
significant. Likewise, incentives or rewards could also be given to the innovative Sukuk
structure.
3.2.7.3. Takaful
The development of Takaful industry in Indonesia is quite promising. There is a growth trend
in the industry every year although the market share is still lower compared to conventional
insurance. To increase the potentials and to enlarge the industry the following are some of the
recommendations that can be considered in this report, namely:
 A strong capital structure is significantly needed to expand the Takaful industry in
Indonesia. The market is open but it needs strategy on how to focus on products,
distribution channels which are suitable for product type and target market, education
programs, marketing plans and selling processes and research and development. With
a strong capital, the Takaful companies can do many things such as sustainably
product development, educating the society on Takaful products and increase public
confidence to the Takaful companies. To realize this, each Takaful companies has to
attempt to generate more capital from investors who would like to invest in the
industry beside doing merger among the Takaful companies is also one of the
possibilities.
 Lack of awareness of Takaful by the public at large is still one of the factors that
prevent the industry to expand. Public need to get more information about Takaful
practices, for example what products are really suitable for the purpose, how much
they can pay and how to collect contributions and payments. More efforts need to be
done to socialize and educate the public on Takaful industry to increase their
awareness and willingness to buy Takaful products.
 Finally, the support from the government to Takaful industry is needed at this initial
phase of development. Government-linked business, for example, should give priority
to Takaful and Islamic methods as in the case of Malaysia to expand the market share
of the industry. Likewise, a supportive regulatory framework that would facilitate the
industry development (and not to restrict it) is also needed.