COOPERATIVE TAKAFUL MODEL: A NEW GAME CHANGER

Purpose- Though the takaful industry is undergoing a period of rapid development and growth, it has been seen to be too commercialised and the mutually spirit was seen disappeared. On the other hand, it faces many critics for imposing terms and conditions that benefitted takaful operators and not sufficient to cover the needs of the participants. Therefore, the study aims to analyse an alternative model to takaful industry in Malaysia using cooperative takaful model by analysing the mutuality and cooperative concept and discussing few controversial issues related to existing takaful model.   Design/methodology/approach- The study applied qualitative research method in achieving all objectives through documents analysis, focus group discussions and interviewed. Findings- The finding proposed the cooperative takaful model as an alternative to current models. The advantages of cooperative takaful model are it’s ability to uphold cooperative and mutuality concept and it’s ability to reduce overdependence on the tijari based takaful. Besides, it offers several benefits to participants compared to the existing takaful models. By participating in cooperative takaful, the participant also became the owner of takaful company where some of monthly takaful contribution will be utilise for acquiring company’s share. However, there are some of limitations of this model such as high paid up capital to set up the business, the existing legal system not suit for cooperative takaful model, create dormant member issue, the issue of conflict of interest between management and participant as well as existing takaful operator worried to establish new model due to small market penetration. Research limitations/implications- the proposed models not even tested yet in Malaysian market. Practical implications- This paper able to help the takaful operators in considering cooperative and mutual models as an alternative for the current models. Originality/value- This paper is to explore new game changer of takaful industry in fulfilling research gap by exploring the suitability of cooperative and mutual model for Malaysian context and redefining takaful as a social concept which is welfare-based and member-focused.