A groundbreaking study of the investment portfolios of takaful
companies, their general investment patterns, and their future
investments
The Islamic finance industry has witnessed remarkable growth
over the last decade, and one of the most successful
segments–poised for even greater expansion–is the
Islamic insurance (takaful) industry. In Takaful Investment
Portfolios, distinguished takaful scholar Abdulrahman Khalil
Tolefat explores the investment portfolios of takaful companies in
both the GCC countries and Malaysia, the tip of Islamic finance
industry. Investigating the trends and patterns of investment of
takaful companies, the book looks at shareholders as well as
general and family funds to determine where these companies are
investing today, and where they are likely to invest in the
future.
Presenting new and novel research on the investment patterns of
takaful companies, Takaful Investment Portfolios covers the
history of the industry and takaful models and how they work, and
presents in-depth studies of both their real-world and desired
portfolio investments.
* Presents unique new research into the investment portfolios of
takaful companies in the GCC and Malaysia
* Examines the gap between desired and actual investment
portfolios of takaful companies
* Explores expected areas for future investment
Groundbreaking in its depth, Takaful Investment
Portfolios is an unprecedented study of the investments of
takaful companies.
Table of Content
Preface ix
Acknowledgments xiii
List of Abbreviations xv
Chapter 1 Introduction 1
Rationale for Researching Investment Portfolio Composition of Takaful Companies 1
Aims and Objectives 4
Scope and Delimitation 5
Research Methodology 6
Overview of the Book 6
Chapter 2 Insurance and Islamic Law: An Introduction to Takaful 9
The Concept of Insurance in Islamic Sources 9
Views of Contemporary Jurists on the Insurance Contract 13
Arguments Regarding the Validity or Invalidity of Commercial Insurance 15
Conclusion 27
Notes 28
Chapter 3 Takaful Models and Implementations, Trends, and Developments 31
Takaful Undertaking Principles 31
Islamic Insurance Operational Models 32
Differences Between Takaful and Other Forms of Insurance 44
Trends and Developments in the Takaful Industry 45
Conclusion 52
Notes 53
Chapter 4 Research Methodology 55
Methodological Shortcomings of the Literature 56
Research Strategy 56
Research Questions, Objectives, and Hypotheses 57
Research Design 58
Sampling Strategy 59
Research Methods 61
Quantitative Data Analysis 68
Qualitative Data Analysis 70
Conclusion 70
Notes 71
Chapter 5 Exploring Investment Behaviours and Investment Portfolios of Takaful
Operating Companies in the GCC and Malaysia 73
Total Investment Portfolio of Takaful Operating Companies for All Funds 74
Investments in Shareholders’ Fund 75
General Fund 86
Family Funds 94
Conclusion 97
Chapter 6 Locating the Differences Between Actual and Desired Investment Portfolios 99
Shareholders’ Fund 101
General Fund 106
Family Funds 111
Conclusion 114
Chapter 7 Contextualising the Findings 117
Overall Portfolio Compositions 117
Investment Accounts 125
Investment in Sukuks 129
Investment in Equities 134
Return on Investment (ROI) 138
Mutual Funds/Unit Trusts 140
Real Estate Investments 141
Conclusion 142
Notes 143
Chapter 8 Conclusion and Recommendations 145
Main Findings of the Study 145
Recommendations of the Study 149
Research Limitations 153
Recommendations for Future Research 153
Conclusion 154
Note 155
Appendix A 157
Appendix B 163
Appendix C 215
Bibliography 217
About the Authors 223
Index 225
About the author
Dr. Abdul Rahman Khalil Tolefat began his career at the
Central Bank of Bahrain. He later served as both chief executive
officer and chairman of Allianz Takaful in Bahrain, the global hub
for Islamic insurance (takaful) of Allianz Group. After leaving
Allianz, he founded ITQAN Financial Services for which he
now serves as Chairman and Managing Director. In addition, Dr.
Abdul Rahman was a member of the CBB Committee that developed the
insurance rulebooks in coordination with Pricewaterhouse Coopers and
a member of the working group between the International Association
for Insurance Supervisors (IAIS) and the Islamic Financial Services
Board (IFSB).
Dr. Mehmet Asutay is a Reader in Middle Eastern and
Islamic Political Economy and Finance at the School of Government
and International Affairs, Durham University; Director of the
Durham Centre for Islamic Economics and Finance; Course Director of
the MA/MSc in Islamic Finance; and the Director of the Durham
Islamic Finance Summer School. Also, he serves as Managing Editor
of Review of Islamic Economics and Associate Editor of the
American Journal of Islamic Social Sciences, and is on the
Editorial Advisory Board of International Journal of Islamic and
Middle Eastern Finance and Management.
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