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What are the two main models used in takaful?

Asked by Anonymous Sep 02, 2026 0 views 1 answers
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Answered Sep 02, 2026

The practice of Islamic cooperative insurance relies primarily on two principal operational and financial frameworks: the Mudaraba model and the Wakala model. In the Mudaraba model, the operator acts as an investment manager sharing in the profits generated from the investment of insurance funds, whereas in the Wakala model, the operator acts as a dedicated agent managing the underwriting operations in exchange for a predetermined, fixed agency fee, while policyholders retain the surplus underwriting funds.

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