Underwriting

It involves risk assessment and participant selection by still ensuring Shariah compliance.

Family Takaful ("life insurance") evaluates health, lifestyle, etc. using both medical and non-medical data to classify risks in three category: standard, substandard or unacceptable.

General Takaful ("P&C") focuses (among others) on property or liability risks. Terms are adjusted based on hazards, claims history (useful for actuarial pricing) and market conditions. Risks linked to prohibited activities like alcohol cannot be accepted.

Claims Management

Claims must be genuine, documented and payment are processed efficiently.

=> In Family Takaful, claims follow a process: notification >verification > document submission > payment to the participant (Fara’id or Hibah-gift).

In General Takaful, underinsurance is managed through the average clause (similar to quota share in reinsurance) or reinstatement clause. Loss adjusters independently assess damages and support claim manager in their evaluation.

1. Banca-takaful

2. Agency

3. Broker

4. Direct marketing

5. Online channels

• agency force seems to do more annual premium business

• Banca seems to do more single premium business

-Rufaidah

Permissible interest in takaful

Good faith

Indemnity

Subrogation

Contribution and

Proximate cause.

For example the subrogation is the right of Takaful operator to take over the policy holder's legal right to cover damages.It also allows TO to take action in policy holder's name in paying claim.

In underwriting we learnt that it is a process of assessinv and classifying the degree of risk of applicants. Apllies to new and renewal business.

TO must avoid adverse selection

Purpose is to underwrite and maintain profitable portfolio.

TO must consider Shariah factors in underwriting. The decisions in underwriting are: Acceptance,loading,Modifying terms and provisions or rejection.