Takaful Malaysia’s business model was founded on the requirements and practices of Shariah. It has adopted the Wakalah contract as its business model.
This model allows Takaful Malaysia to employ the agency system effectively in distributing the Takaful products on sound commercial values and provide sufficient remuneration that commensurate with the services rendered. The intermediaries also play a big role in the community. They spread knowledge on the key benefits of being insured and convince people to enjoy these benefits. People can rely on these well-trained intermediaries to advise and recommend them on the various plans and settlement provisions, which will best suit their needs.
Under this model, Takaful Malaysia will act as the ‘agent’ to manage the Takaful fund on behalf of the participants and will be entitled to a Wakalah (Service) Fee for the services rendered.
This model provides a unique concept of surplus distribution to the participants. By contributing Tabarru’ into the common Takaful fund, both the participant and Takaful Malaysia may be entitled to the share of fund surplus, if any. Note: Tabarru’ (a.k.a. cost of insurance) means a donation for the purpose of which is not commercial and is used to help other proposed participants in times of misfortune for the purpose of solidarity, brotherhood and cooperation among the proposed participants.