Actuarial model for takaful contributions via optimal retakaful
Journal of Islamic Accounting and Business Research
ISSN: 1759-0817
Article publication date: 1 April 2022
Issue publication date: 31 May 2022
Abstract
Purpose
This paper aims to present an actuarial model of takaful to cover death and permanent total deficit of contributors benefiting from Mourabaha financing for real estate, taking into account modern takaful systems around the world. The main goal of this paper is to design an optimization program that helps to obtain a marketable and profitable takaful product by using the retakaful as a safety and technical support tool.
Design/methodology/approach
The study adopts an actuarial approach for determining takaful contributions and optimal choice of an adequate form of retakaful to maximize the technical surplus of a takaful company. A resolution method based on genetic algorithms is also developed to solve the optimization program.
Findings
This actuarial model allows to provide high added-value support to takaful and Islamic finance and also reassures clients of purchasing real estate through the Mourabaha product.
Research limitations/implications
It should be noted that the choice of an effective Islamic borrower insurance product (takaful borrower) obviously depends on the strategy adopted by the takaful operator (type of takaful, pricing, experience and statistics observed, etc.), the form of retakaful, the behavior of the participants and the nature of the portfolio. Moreover, the program developed in this paper is suitably affordable and is closely linked to the hypotheses.
Originality/value
The strong point of the present program relies on the case where the reinsurer establishes itself as a partner of choice and to enrich the takaful fund. In addition, the actuarial tools used in agreement with genetic algorithms have made it possible to optimize with efficiency and ease of calculation.
Keywords
Acknowledgements
Conflict of Interest: The authors have no affiliation with any organization with a direct or indirect financial interest in the subject matter discussed in the manuscript On behalf of all authors, the corresponding author states that there is no conflict of interest.
Citation
El Attar, A. and El Hachloufi, M. (2022), "Actuarial model for takaful contributions via optimal retakaful", Journal of Islamic Accounting and Business Research, Vol. 13 No. 5, pp. 778-790. https://doi.org/10.1108/JIABR-11-2020-0339
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited