An Assessment of Customer’s Preferences on The Selection of Takaful Over Conventional: A Case of Saudi Arabia

Faisal Nazir, Azman Bin Mohd. Noor


This paper aims at assessing the motivational factors that influence the customer’s preferences of Takaful over conventional insurance. The customers’ information about the Takaful products and services based on sharia are identified in order to enable them differentiate Takaful and conventional insurance. The research uses mixed method of data collection. This comprises of questionnaires and in-depth interviews with the respondents from four selected Takaful industries in Saudi Arabia. The questionnaires were analysed using simple percentages and for the interviews, thematic analyses were used. Based on the findings of the study, the customer’s preferences on the selection of Takaful over conventional insurance include protection of Takaful product by sharia, support from the government. Similarly, the absence of risk incurred or transferred to participants, funds contributed in the spirit of brotherhood for all members. Moreover, another customer’s preferences is that contributions (tabarru’) are invested in non-interest based capitalization by the Takaful agents and profits are shared according to individual contributions. Based on Takaful, donations are established at the pooling system in line with sharia and they are formed on the bases of sympathy, consciousness of the idea of tabarru’ as well as abstaining from gharar, maysir and riba.


Takaful; insurance; customer preferences

Full Text:



Abdul-Hamid, M., Osman, J. and Amin-Nordin, B.A. (2009). Determinants of Corporate Demand for Islamic Insurance in Malaysia. International Journal of Economics and Management, Vol. 3 (2): 278-296.

Ab-rahman, A., Ali, N., Che-Seman, A. and Wan-Ahmad, W.M. (2008). Comparative Study between Auto Takaful and Auto Insurance Purchasing Behaviour among Malaysian Undergraduates. Jurnal Syariah, Vol. 16 (1): 75-88.

Amin, H. (2012). An Analysis on Islamic Insurance Participation. Jurnal Pengurusan,Vol. 34: 11 – 20.

Annuar, H. A. (2004). Al-Wakalah and Customers’ Preferences toward It: A Case Study of Two Takaful Companies in Malaysia. The American Journal of Islamic Social Sciences: 28-49.

Aris, N. A., Tapsir, R., and Talib, M. K. A. (2012). Risk and Risk Management of Takaful Industry. Journal of Global Business and Economics, Vol. 4 (1).

Ayuba, F. (2014). Non-economic Factors Influencing the Islamic Insurance (Takaful) Services Consumption in Kano Metropolis, Nigeria; unpublished M.SC. Dissertation submitted to the Department Business Administration and Entrepreneurship Studies, Bayero.

Billah, M.M. (2008). Islamic Insurance: Its Origins and Development. Arab Law Quarterly, Vol. 13 (4): 386-422.

Billah, M. M. (2001). Principle of Contract Affecting Takaful and Insurance - Compared. Part 1: Arab Law Quarterly (London).

Chua Abdullah, O. (2000). A Critical Evaluation of Insurance and Takaful. Proceedings from the International Conference on Takaful/Islamic Insurance, Kuala Lumpur.

Engku, R. A., Engku, A. and Hassan, Scott P. O. (2008). Essential Guide to Takaful. Kuala Lumpur, CERT :157-158

Fisher, O. C., Taylor, D. (2000). Prospects for the Evolution of Takaful in the 21st Century. Proceedings of the Fifth Harvard University Forum on Islamic Finance: Islamic Finance: Dynamics and Development Cambridge: 237-254.

Hamid, M. A., and Rahman, N. M. N. A. (2011). Commitment and Performance: A Case of Takaful (Islamic Insurance) Representatives in Malaysia. Australian Journal of Basic and Applied Sciences, Vol.5 (10): 777-785.

Islamic Financial Services Board (IFSB) and International Association of Insurance Supervisors (IAIS). 2006. Issues in Regulation and Supervision of Takaful.

Jacky Lim, M. F. (2010). History, Progress and Future Challenge of Islamic Insurance (Takaful).

Kadir, M. R. A. (2011). Our Strategy Towards Developing a Progressive Takaful Industry. Keynote Speaker at the Official Launch of AIA AFG Takaful Berhard, Kuala Lumpur, 28 January 2011. Retrieved from:,

Kasim, N. A. A. (2012). Disclosure of Shariah Compliance by Malaysian Takaful companies. Journal of Islamic Accounting and Business Research, Vol. 3 (1): 20-38.

Mahmood, N.R. (2001). Takaful: The Islamic System of Mutual Insurance: The Malaysian Experience. Arab Law Quarterly, Vol. 6 (3): 280-296.

Maiyaki, A.A. and Ayuba, H. (2015). Consumers’ Attitude toward Islamic Insurance Services (Takaful) Patronage in Kano Metropolis, Nigeria. International Journal of Marketing Studies, Vol. 7 (2).

Masud, H. (2011). Takaful: An Innovative Approach to Insurance and Islamic Finance. U. PA. J. Int.l., Vol. 32 (4): 1131-1164.

Maysami, R.C., and Williams, J.J. (2011). Evidence on The Relationship between Takaful Insurance and Fundamental Perception of Islamic Principles. Applied Financial Economics Letter, Vol. 2 (4): 229-232.

MdRazak, M. L., et al. (2013). Acceptance Determinants toward Takaful Products in Malaysia. International Journal of Humanities and Social Science, Vol. 3 (17).

Mohd. Izhar, Tariq Masood and Mohd Saeed Khan (2010). Problems and Prospects of Islamic Banking: A Case Study of Takaful. Aligarh Muslim University, Aligarh, India.

Naail, M.K. and Norsham, M.N. (2014). Factors Influencing the Choice of Takaful Over Conventional Insurance: The Case of Malaysia. Journal of Islamic Finance, Vol. 3 (2): 001 – 014. IIUM Institute of Islamic Banking and Finance.

Noor, A. M., and Abdullah, M. A. (2009). Takaful (Islamic Insurance) Benefit: Ownership and Distribution Issues in Malaysia. Journal of Islamic Economics, Banking and Finance.

Syarikat Takaful Insurance Company. (2009). Al-Mudharabah. Retrieved from http: www.takaful-, 28 March 2012.

Yusof, M. F., (2006). Takaful (Islamic Insurance) Concept and Operational System from the Practitioner’s Perspective. Kuala Lumpur: BIMB Institute of Research and Training. Page: 7-15.

Yusuf, T. O., Gbadamosi, A., and Hamadu, D. (2009). Attitudes of Nigerians toward Insurance Services: An Empirical Study. African Journal of Accounting, Economics, Finance and Banking Research, Vol. 4(4): 34-46.

Zainuddin, S., and Noh, I. N. M. (2013). An Overview of The Emergence of Takaful: An Islamic Type of Insurance Policy. International Journal of Business and Economics Research, Vol. 2 (5): 112-115.



  • There are currently no refbacks.

Indexed By :