A Comparative Analysis of Takafol Models and Identifying its Vulnerabilities and Weaknesses from the Perspective of Stakeholders

Abstract

Since takafol is regarded as a product with a structure formed by Islamic contracts, its assessment and consideration of stakeholders’ interests as a guarantee of its stability in the insurance market are inevitable. On this basis, in this research, by a comprehensive analysis of the structure and various models of takafol at both general and family levels, we have tried to detect its vulnerabilities and compare its different models from the perspective of the main owners and stakeholders, using content analysis method. It seems that with a mere structural change of different models of takafol, our goal which is a fair pricing and observation of the interests of participants as leaders, is not achieved. The solution of agency cost reduction is approaching the structure of mutual insurance, limiting TO options, increasing participants' choices, and following the interests of participants as leaders. With the reinforcement of corporate governance from the perspective of participants in takafol structure, disadvantages of asymmetric information between participants and TO, such as adverse selection and moral hazards are reduced.

Keywords

• takafol
• stakeholders
• asymmetric information
• corporate governance