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Modeling the Premium and Contract Properties of Family Takaful (Islamic Life Insurance) نمذجة قسط وخصائص عقد التكافل الأسري (التأمين الإسلامي على الحياة)

Author

Listed:
  • Jumadil Saputra

    (School of Social and Economic Development Universiti Malaysia Terengganu, Kuala Terengganu, Terengganu, Malaysia)

  • Suhal Kusairi

    (School of Social and Economic Development Universiti Malaysia Terengganu, Kuala Terengganu, Terengganu, Malaysia)

  • Nur Azura Sanusi

    (School of Social and Economic Development Universiti Malaysia Terengganu, Kuala Terengganu, Terengganu, Malaysia)

Abstract

The premium is a deterministic function to compensate for losses due to random events, and a crucial element for the operation of the standard insurance company. This paper focuses on the practice of family takaful and considers properties of the contract in determining the premiums comprehensively and in a way that makes them Shariah-compliant. We have developed a new mortality derivative formula and model of the premium for an equity-linked policy (unit-linked product). We have adapted the option pricing of the Black-Scholes model for periodical premiums, taking into account a minimum death benefit, the value of surrender option, and maturity guaranteed payoff. We have also added some assumptions for the underlying asset prices following negative discrete dividend extensions from the dynamic escrowed model. The purpose is to obtain an unbiased option price for the underlying asset. We found it to be a satisfying product with a fair periodical premium, which has great flexibility in its features and complies comprehensively with Shariah law. يعتبر قسط التأمين وظيفة حتمية للتعويض عن الخسائر الناجمة عن الأحداث العشوائية والغير متوقعة، وعنصرا هاما في عمليات شركات التأمين، وتركز هذه الورقة على ممارسة التكافل الأسري، وتنظر في خصائص العقد في تحديد أقساط التأمين بشكل شامل وبطريقة تجعلها متوافقة مع الشريعة الإسلامية. في هذا الصدد قمنا بتطوير معادلة جديدة لمشتقات الوفيات ونموذجا للقسط الخاص بوثيقة مرتبطة بالأسهم (منتج مرتبط بالوحدات). وقمنا كذلك بتكييف تسعير الخيارات لنموذج بلاك سكولز (Black-Scholes model) للأقساط الدورية، مع مراعاة الحد الأدنى لاستحقاقات الوفاة، وقيمة خيار التسليم، وضمان الدفع عند نهاية العقد. كما أضفنا بعض الافتراضات لأسعار الأصول الأساسية بإتباع امتدادات توزيع أرباح منفصلة سلبية من النموذج الديناميكي المضمون، والغرض منه هو الحصول على سعر الخيار غير متحيز للأصل الأساسي. وقد توصلت النتائج أن منتج مرضي مع قسط دوري عادل، والذي فيه مرونة كبيرة في معالمه ويتوافق بشكل شامل مع أحكام الشريعة الإسلامية.

Suggested Citation

  • Jumadil Saputra & Suhal Kusairi & Nur Azura Sanusi, 2017. "Modeling the Premium and Contract Properties of Family Takaful (Islamic Life Insurance) نمذجة قسط وخصائص عقد التكافل الأسري (التأمين الإسلامي على الحياة)," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(2), pages 135-157, July.
    • Handle: RePEc:abd:kauiea:v:30:y:2017:i:2:no:12:p:135-157
    DOI: 10.4197/Islec.30-2.12
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    References listed on IDEAS

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    More about this item

    Keywords

    Premium of family takaful; Equity-linked policy and Escrowed dynamic discrete dividend model. قسط التكافل العائلي، السياسة المرتبطة بالأسهم وأنموذج توزيع الأرباح الديناميكية المنفصلة.;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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