In Malaysia, all takaful operators are operating based on full-fledged takaful business model. Comparatively, most of takaful operators in Indonesia are based on window concept business model. Window takaful concept are more towards product manufacturer and distributor relationship where takaful operator will launch takaful products to meet with the need of conventional insurer which act as distributor. Moreover, takaful operator is established with minimal infrastructure where most of the core back-end and supports are outsourced to the conventional insurer which has comprehensive infrastructure and establishment. Nevertheless, regulator in Indonesia is trying to move towards full-fledged model.
Coming back to Malaysia takaful landscape, there are several takaful operators particular new ones are more towards window concept business model where their main shareholders, established insurers, are responsible to distribute the takaful products via their existing conventional distribution channels. In addition, several core functions including actuarial, IT, underwriting, etc are heavily outsourced to the conventional expertise. This should be allowed by regulator only for newly setup companies with limited duration say 3 years after which the takaful operator shall manage internally with few exception like IT which may require longer period say 5 years. By imposing such condition, takaful industry shall see strong development of talents to boost the market penetration in the medium term. When Bank Negara approved 4 new takaful licenses in 2010, it has selected those with strong and established conventional insurers (mainly foreign) with the intention to promote the transfer of knowledge and technology to takaful operators. This can only be achieved provided that the takaful operator is required to be independent from the conventional insurer within specified timeframe. Therefore, all those relevant takaful operators must establish a clear roadmap to indicate their specific deadline to separate themselves from the conventional insurer in totality. The separation between conventional and takaful is vital to ensure that the takaful business is 100% sharia compliance end to end.
