Retakaful - Operating Model

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


We adopted the Wakalah-Waqf Model which was developed by members of our highly reputable Shari’a Board. This operating model works in the same way as the Wakalah model already widely used in the Middle East and South East Asia but has certain distinctive features of a Waqf (endowment) embedded in it.

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

Wakalah-Waqf Model

This model requires the setting up of a Waqf fund through an initial donation by the Retakaful operator. It becomes the nucleus for the relationship between the participant 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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