Cooperative Insurance

Cooperative Insurance (Takaful) is to enhance social solidarity amongst policy holders. It is not purely profit oriented, but seeks protection against risks in the first place. And to absorb material consequences of any loss and damage to insured person or his properties. All participants in Takaful (Policy holders) cooperate on such a principle, to compensate anyone of them exposed to damage due to any of the risks covered by the policy. Since those policy holders are the owners of such an insurance process, they are entitled to retrieve surplus of operations in cash, each according to his premium amount, after allocation of overhead charges and expenses.

Through such a perspective, cooperative insurance practiced by Takaful Insurance Company is different from conventional insurance, in which all profits made from the sale of insurance products and services go to shareholders not to policy holders as in cooperative insurance.

On the other hand, Takaful Insurance Company in view of cooperative insurance is committed to invest policy holder’s monies, against a certain percentage of investment revenue in favor of the shareholders, for their management and investment of such funds. And this is one of major differences between cooperative and conventional insurances, as cooperative insurance separates between shareholders and policy holders in a way that enables policy holders to be real participants in the whole process.