International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

A Study on Takaful and Conventional Insurance Preferences: The Case of Brunei
Mohd Shril Matsawali, Mohd Fadzilah Abdullah, Yeo Chui Ping, Siti Yusmardinah Abidin, Masnalliza M. Zaini, Hardi M. Ali, Farooq Alani, Hisham Yaacob

The word takaful is derived from Arabicverb„Kafala‟, which means toguarantee, looking after, to help and to take care of one‟s needs. Takaful is a system of Islamic insurance based on the principles of „ta‟awun‟ (mutualassistance) and „tabarru‟‟(voluntarycontribution). The Takaful industry has developed rapidly in Brunei Darussalam sinceearly1990s. The objective of this paper is to examine the public preferences and understanding between Takaful and conventional insurance. It also attempts to identify reasons and factors that make the conventional insurance contradicted with the Shari‟ah principles. The samples were randomly chosen consisting of residents of Brunei Darussalam and on-line questionnaires were distributed. It is found that a big majority of the respondents do not understand what takaful is. Despite that, a big majority prefer takaful over conventional insurance. The study proposes that the takaful companies should educate the public to increase their understanding on takaful.

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