Pandemic Crisis: Malaysian Takāful Market

Abstract

With the progressive number of COVID-19 cases, this pandemic has adversely impacted the Takāful market in different forms containing liquidity impact, financial market volatility and solvency capital. This study describes the Malaysian takāful and insurance market throughout the COVID-19 crisis as well as its response to alleviate the burden faced by policyholders/ certificate holders of life insurance and family takāful plans from the economic and Sharīʽah point of views. Qualitative approach is applied in this study to collect information, documents and data accordingly concerning to the topic discussed. The data will be explored using qualitative content, narrative, and discourse analysis to deliver its results and discussion. By understanding the precarious scenario of the Malaysian takāful and insurance market during the COVID-19 pandemic, we can further enhance the support to the regulator who has taken the initiative to direct the insurance and takāful industry to initiate adequate response to facilitate policyholders/ certificate holders during the outbreaks and decide what the best way forward would be as aligned with Maqāṣid al-Sharīʽah. This will ensure its positive impact in the Takāful market, not only to nurture sustainability in our ecosystem, stabilize the socio-economic but to safeguard policyholders/certificate holders accordingly so they could withstand pre, present and post pernicious outbreaks and pandemics. This study inspires Takāful practitioners, policyholders/ certificate holders, academicians, and the society to recognise the importance of takaful industry and it’s preventive measures to avoid takāful loss in this swift spread of COVID-19 comprising catastrophic reserves by takāful operators to mitigate adverse catastrophic risks to human life, and building a more humanising takāful which is in tandem with Maqāṣid al-Sharīʽah that attracts more potential policyholders/ certificate holders.