Challenges in the Adoption of Takaful in Qatar- Research Proposal (Research Proposal Sample)

University     Challenges in the Adoption of Takaful in Qatar By   Student’s Name   Date of Submission   Instructor Contents TOC \o "1-3" \h \z \u II.Abstract PAGEREF _Toc427583292 \h 3III.Introduction PAGEREF _Toc427583293 \h 3IV.Background PAGEREF _Toc427583294 \h 4V.Justification PAGEREF _Toc427583295 \h 6VI.Literature Review PAGEREF _Toc427583296 \h 6A.Operating Model of Takaful PAGEREF _Toc427583297 \h 7B.The Operating Models for Takaful PAGEREF _Toc427583298 \h 91.The Mudharabah Model PAGEREF _Toc427583299 \h 92.The Wakalah Model PAGEREF _Toc427583300 \h 10C.Differentiating Takaful from Conventional Insurance PAGEREF _Toc427583301 \h 10D.An Overview of Takaful in Qatar PAGEREF _Toc427583302 \h 11E.Challenges of Takaful in the Qatar PAGEREF _Toc427583303 \h 13VII.Research Methodologies PAGEREF _Toc427583304 \h 15A.Research Design PAGEREF _Toc427583305 \h 15B.Research Questions: PAGEREF _Toc427583306 \h 16C.Research Objectives PAGEREF _Toc427583307 \h 17D.Target Population PAGEREF _Toc427583308 \h 19E.Research Time Span and Resources PAGEREF _Toc427583309 \h 20F.Data Analysis PAGEREF _Toc427583310 \h 20G.The Interview Questions PAGEREF _Toc427583311 \h 21H.Questionnaire PAGEREF _Toc427583312 \h 22VIII.Conclusion PAGEREF _Toc427583313 \h 23IX.List of References PAGEREF _Toc427583314 \h 24 Abstract Takaful insurance industry has grown tremendously over the last decade. Takaful is a big industry in Islamic countries like Malaysia and Saudi Arabia. In the past ten years, the Islamic insurance has been growing beyond borders and now it is being adopted in the Qatar. The emergence in the Qatar is because of economic growth that supports Takaful. Although, there are strides that have been made, Takaful has not entirely grown as expected. This research proposal begins by explaining the meaning of Takaful and goes to discuss the background of the research. The research will seek to find out what Qatar citizens know about Takaful. The proposal will also analyse various literature to determine the current knowledge in the area. The research will utilise questionnaires as well as interviews to answer the research questions. Introduction Despite the existence of Takaful insurance for over three decades, many people in the Qatar have not embraced this Islamic type of insurance fully. Qatar is an Islamic country, and it is expected that everyone will embrace Takaful. Takaful is a product of insurance that is compliant with Shariah. Takaful emerged because conventional insurance policies were not Shariah-compliant. There are elements of conventional insurance that do not conform to Islamic principles. Examples of such elements are the issue of uncertainty, interest, and gambling. For Muslims to embrace insurance, there was a need to form an alternative form of insurance that was Shariah-compliant. And Takaful was born. Takaful bases its ideas on cooperation, solidarity, and mutual indemnification of losses of the members. Due to the expansion of the Muslim religion in the world and Qatar, the adoption of Takaful is also growing in countries that have Muslims. It is more likely for them to accept Takaful than the conventional insurance since it is in agreement with their religious doctrines. The word ‘takaful’ is Arabic and means ‘guaranteeing each other’. It involves members of a community mutually agreeing to help each other in the event of losses to one of the member’s property. Despite the issue of Takaful being introduced in the Islamic world in the 1980s in place of conventional insurance, the concept has been with the religion for a long time. The aspect of guaranteeing and helping each other has been common among the Arabs way before the advent of the Islamic faith. Principally, Takaful has three chief principles. The first principle is that of ‘mutual responsibility’. The second is ‘cooperation with one another’ while the third one is protecting each other from any misfortune or disaster. When a member joins a group, as much as he may be seeking protection, he must also contribute to help members of the group that are in need (Abu-Hussin, et al., 2014, p27). In Takaful system, the premium paid is based on the idea of donation. Those who suffer losses and claim benefits are paid from the pool of funds accumulated. Currently, the Takaful insurance practice has two main forms of contacts. The first is Family Takaful where there is an investment and savings programme with a fixed period of maturity, normally more than a year. The second form is General Takaful, which can be said to be contracts of joint guarantee among a group of people to cater for compensation in the event of a loss. The latter, General Takaful is a short-term contract and usually lasts for a year. Background The economy of Qatar has been growing significantly in the last ten years. Since 2008, the real GDP of the country has been increasing by 10.7% per annum. Currently, Qatar is among the richest countries in the world (PWC, 2015). This is because of gas exports. The country has explored its vast natural gas reserves to become the leading gas exporter in the world. Despite this enormous growth in the economy, the Takaful industry is not following suit. As an economy grows, its sectors should follow suit. As other sectors of the Qatar economy are growing, Takaful is growing, but not as much as the economy. This poses a need for research to find out why this is the case. Therefore, there is a need for the government, Takaful operators, and the people of Qatar to understand the challenges that have caused the Takaful industry to experience a slower growth that the economy The insurance industry in Qatar is growing, but the conventional insurance has been growing more than Takaful. There is a need to find out why Takaful, despite being Shariah-compliant has been experiencing slower growth than conventional insurance. As an Islamic country, the population of the country is expected to support Takaful fully because it follows Islamic principles. Takaful offers the public an alternative to conventional insurance. The general public, therefore, is expected to embrace Takaful more than conventional insurance. However, the conventional insurance continues to grow. Are there measures that need to be put in place to facilitate the growth of Shariah-compliant insurance? Sure, there are, and the research that this paper proposes will determine if there are flaws in the current system of Takaful. There have to be good relationships among regulators of the industry, the operators, and the customers for Takaful to realise its potential in the country. Islamic financial products comply with the norms and the system of the Muslim religion. All Muslims view alcohol, pork, gambling, and pornography as haram. Therefore, the Islamic investments have to be clear such things. The growth of the Islamic financial products like bonds and mortgage has seen more growth than Takaful insurance despite complying with the same Shariah. This paper has proposed a research to determine the challenges in the adoption of Takaful. The findings of the research will help answer the question why Takaful growth is slower than other insurance products. Justification The research will be useful to regulators, Takaful operators, insurance consumers and researchers. The insurance regulators will need the findings of the research to address the challenges to increase penetration of Takaful in Qatar. Through the research, the regulators can come up with mechanisms and policies to implement to boost Takaful. Businesses organizations, with the help of the research findings, can start issuing Takaful in the market. If a company already offers the policy, through the findings of the research, it can find it best sell it to the customers. The company can also find out how to rebrand, modify, or advertise the product to meet the needs of the market. Besides, the public will be more informed about Takaful. They will make informed decisions when trying to choose between Takaful and conventional insurance. Finally, researchers will find the findings of the research useful when doing research on other areas of Takaful insurance. Literature Review This section reviews the literature on areas that will be necessary for the research. The section begins by examining the literature available on the operating model of Takaful including the characteristics and reasons why conventional insurance is unacceptable in Islam. Besides, information on the models of implementing Takaful will be researched. The section will also investigate on information about the differences between Takaful and conventional insurance. Finally, this segment will analyse the literature available on the challenges of adopting Takaful, particularly in Qatar. Operating Model of Takaful An article by Abdalelah Saaty and Zaid Ansari outlines the unique characteristics of Takaful insurers that recognize the major principles of Takaful and Islamic norms (Saaty & Anzari, 2008). Discussing these features will boost the understanding of how Takaful works. These unique characteristics of Takaful include: In Takaful, there is an establishment of two separate funds; policyholders’ fund, which can also be said to be Takaful fund and operator’s fund (Saaty & Anzari, 2008). The operator’s fund is also called shareholder’s fund. Operation of Takaful is not that different from players in conventional mutual insurance. Takaful fund follows cooperative principles. It is a form of mutual risk sharing using charitable donations (Ochieng, 2013). The policyholders of the fund are bound to get surplus from the fund in the same way they will absorb the deficits. The donation that each member contributes depends on the level of ris...