74 Takaful and Mutual Insurance
no underwriting surplus is to be shared, a mudaraba contract is universally permissible. While many of the products developed during this time were needed to support compulsory coverage, such as motor and mortgage loans, voluntary coverage also was being developed. STM developed b ancatakaful operations that pioneered savings products. Etiqa, consisting originally of two separate companies, Maybank Takaful and Takaful Nasional, brought the development of bancatakaful to new heights with the products sold by Maybank Takaful. Whereas STM products looked distinctly different from conventional products, Maybank Takaful products were designed to look identical to the products sold by its sister company Maybank Insurance. This allowed potential participants to choose either conventional insurance or takaful, depending on their needs. Takaful Nasional pioneered the use of an agency force to sell takaful, dealing with issues such as paying commissions to agents directly from contributions received rather than from income attributed to the operator. In the late 1990s, Bank Al Jazira in Saudi Arabia made popular the wakala model, in which the operator is paid fees to run the takaful fund. In this sense, the takaful fund is set up as a pure cooperative or mutual, but pays the operator a fee to run the business. The operator makes a profit by ensuring that its actual costs are lower than the fees charged. This is similar to a mutual insurer or reciprocal that is run by a stock company, with the stock company taking fixed or volume-based fees. This model quickly spread to Malaysia through its development by Takaful Ikhlas, thus uniting the Far East and the Middle East with a mutually acceptable model. The late 2000s has seen the emergence of large multinationals interested in offering takaful. Here the motive is purely profit, as many of these companies market to non-Muslims as well as Muslims. Such multinationals are stock insurers rather than mutuals. For example, Prudential is a market leader in Malaysia and Indonesia, with Allianz also setting up operations in Indonesia. AIA has shown interest through the development of operations in Indonesia as well as Malaysia. ING, Great Eastern Life, and Friends Provident (in conjunction with AM Assurance) have just started operations in Malaysia. The large reinsurers have also entered the field of retakaful, with players such as Munich Re, Swiss Re, and Hannover Re all offering retakaful. Faith is seen as a means of marketing takaful rather than the sole reason for its attractiveness. Whereas most of these multinationals have flourished under the agency distribution system, some have ventured into bancatakaful. Prudential in Malaysia developed bancatakaful through Bank Simpanan National in addition to its agency