Abstract:

Whether it relates to personal life or business transactions, one of the main factors that make human being unsafe is misfortune. It has become custom that people who wish to transfer or mitigate the consequences of misfortune do so through the purchase of insurance premiums, which serve to compensate misfortune with financial aid when the conditions of such insurance coverage occur. There is no doubt that insurance is part and parcel of practices in all types of human societies as witnessed all over the globe. However, some negative elements, such as the uncertainty, usury and gambling, are often included into the practices of conventional insurance. Due to the unfair ethical nature of these aforementioned practices, conventional insurance is sometimes rejected since these practices are against the teachings of Islam. In order to benefit from insurance and steer away from such practices, an alternative form of insurance known as Takaful has been recommended by experts in Islamic finance. Since its introduction, Takaful seems to have gained momentum not just in Muslim majority lands but also in the non-Muslim countries. Hence, this study aims to discover to what extent has Takaful been accepted in the countries where Takaful products are presently offered, and to what extent is it potentially possible to introduce Takaful in non-Muslim countries. The sample countries included in this paper are Singapore, India, Canada, the USA, and Australia. By looking at the literature review, it was revealed that the availability of Islamic Banks in the non-Muslim countries is quite limited compared to those in Muslim majority countries. Furthermore, there is a huge potential to introduce and disseminate Takaful throughout India which is home to a Muslim population of 180 million people. By looking back at the existing and potential development of Takaful, the presence of significant numbers in the Muslim communities is one main factor that facilitates the potential expansion of Takaful into future market. Furthermore, it can be said that Takaful has the huge potential for growth with the existing Islamic banks in non-Muslim countries serving as jump boards for future Takaful products. Thus, the findings conclude that there is higher level of acceptability and possibility of Takaful in the conventional systems of Singapore, India, Canada, the USA, and Australia.