Publication:
Challenges of developing a takaful retirement annuity plan in Malaysia
Abstract
This paper aims to explore the challenges facing the development of a takaful retirement annuity plan in Malaysia. It also aims at exploring a new platform to re-launch the same product after being withdrawn from the Malaysian annuity market a few years ago. The research adopts a qualitative approach to address the possible challenges hindering the development of a takaful retirement annuity plan in Malaysia. The research will not discuss the Shari'ah issues deemed settled in previous researches but will only focus on technical challenges related to the instruments of investment and prudential measures. The research found that various challenges face the development of a takaful annuity plan in Malaysia. Some of those challenges are the downsizing of the sukuk market, the shortage of long-term sukuk, longevity risk and risk-based capitalization. The research found that there is a need for a diversified portfolio of securities instead of solely using sukuk as an investment instrument in this product. Re-launching the takaful annuity plan in Malaysia requires the identification of actual challenges facing the development of such a product. The product purported to be re-launched would benefit a large segment of retirees who do not have enough savings during the retirement age. The introduction of such a product will also expand the takaful market in annuities, which remains untapped.
Keywords
Takaful , Retirement annuity plan , Longevity risk , Sukuk
Citation
Soualhi, Y. (2017). Challenges of developing a takaful retirement annuity plan in Malaysia. ISRA International Journal of Islamic Finance, 9 (1), pp. 95-99.
Publisher
Emerald Publishing Limited