Retakaful - Operating Model

Swiss Re began offering Retakaful solutions for the Family (Life) Retakaful business in the Middle East in 2006


We adopted the Wakala-Waqf model. It functions in a similar way as the Wakala model already widely used in the Middle East and South East Asia. The difference is its separate entity, the Waqf. A Waqf is an Islamic endowment or trust which has the ability to accept ownership or make someone else the owner of any assets. The Waqf structure is designed to address the issue of ownership of the participants’ contributions.

Based on the positive experience thus far in the Middle East, we are confident in offering the Wakala-Waqf model to our clients globally. The model has also been accepted by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the National Shariah Advisory Council of Bank Negara Malaysia. It is being used by Takaful operators in Pakistan, South Africa and the Middle East.

Wakala-Waqf Model

This model requires the setting up of a Cash Waqf fund through an initial donation by the Retakaful operator. It becomes the nucleus for the relationship between the participants and the operator, i.e. both have obligations and rights towards this Waqf.

The Waqf fund works to achieve the following objectives:

  • To extend financial assistance to its members in the event of losses.
  • To extend benefits to its members strictly in accordance with the Waqf Deed (rules stipulated in the contract).
  • To donate to charities approved by the Shari’a Board.

The graphical demonstration of the model can be seen in the chart below:

Qard: refers to the interest-free loan that needs to be injected should this be required and which can be recouped by future year surpluses.

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