By 2004, the total gross written premium (GWP) for takaful business (life and non-life combined) had grown to just under $1.4 billion.
Takaful Insurance Resources
Understanding Takaful Practice
Takaful originates from Arabic word Kafalah, which means "guaranteeing each other" or "joint guarantee". In principle, the Takaful system is based on mutual co-operation, responsibility, assurance, protection and assistance between groups of participants
Risk Financing
The purpose of risk financing is to ensure that there will be enough resources (funds) to finance the recovery of any individual or organization from a risk event, and protect their interest.
The following are areas of activity in which risk financing should at least to be targeted at:
1. Evalution of total values at risk
2. Estimation of total cost of risk which consist of :
- Cost of retained losses
- Cost of risk sharing scheme under Takaful
- Risk control and handling costs
- Risk management and administration expenses
3. Identification of appropriate sources of funding in advance of any loss. One of the sources could be proceeds from a Takaful Fund.
