Topic: Case Study - Islamic Financial Management

Question1: Answer all the sections below?

a. Identify the concept of Family Takaful and give examples of its types, aims and applications. ( minimum 50 words )

b. Identify the predictors of the demand of Family Takaful based on reviewing the previous studies on the Family Takaful in general and on Malaysian Family Takaful in particular. ( minimum 50 words )

c. Elaborate about the challenges facing the development of the Family Takaful industry in Malaysia, and suggest solutions. ( minimum 50 words )

d. Propose a conceptual model for the predictors of the demand on Family Takaful. ( minimum 50 words )

The global Takaful industry expands progressively. In Malaysia, the Malaysian Government Bank (Central Bank of Malaysia) is entrusted to play an important role of promoting Family Takaful business via providing better financial infrastructure and providing incentives for sustaining the demand for Family Takaful such as tax relief for Takaful contribution from RM 5,000 to RM 6,000. Additionally, to the new parliamentary initiatives such as the New Economic Model (NEM), the Economic Transformation Program (ETP) and the Tenth Malaysian Plan. www However, the growth of Malaysian takaful industry is still lagging behind the total Takaful market share. According to Datuk Syed Moheeb Syed Kamarulzaman, the president and the Chief Executive Officer of Takaful Ikhlas Sdn Bhd, the penetration ratio for Takaful market in Malaysia was around 10% compared with conventional insurance at 40% in 2010. According to Bank Negara Malaysia report (2012), there is wide gap between the total assets of the Malaysian Takaful industry and insurance industry. The total assets for the Takaful industry was only RM10.6 billion in 2008 compared to the total assets for the conventional insurance with RM130.9 billion for the same period. In 2012 the total assets for the Takaful industry had approached RM19.1 billion compared to RM195.6 billion for conventional insurance. By considering the volume of total assets of both Takaful and Insurance industries, it can be observed that the Takaful fund was way behind the conventional insurance. The above facts represent a considerable untapped market in the Takaful industry in Malaysia. Therefore, it is of critical importance to highlight the predictors of the demand for Family Takaful in Malaysia. Understanding the predictors of the demand on Family Takaful is critical for capturing the utmost potential of growth in the industry.