About Ayady Takaful

“Ayady” an Arabic expression signifying “The Helping Hands” is an Islamic Window instigated by Allied Insurance Company, the leading insurance company of the Maldives.

There is a very significant need for an Islamic concept of risk management system in this island nation. Takaful model is inherently in line with Islamic norms and principles. Thus, Allied Insurance Company as a socially responsible business is obliged to invest in this concept of solidarity and risk-sharing. With a combination of ethical investment policy, significant growth potential and price competitiveness Allied Insurance wish to make Ayady Takaful a compelling business scheme supporting a community well protected and connected.

What is Takaful?

All human activities are subject to risk of loss from unforeseen events. To alleviate this burden to individuals, what we now call insurance has existed since at least 215 BC. This concept has been practiced in various forms for over 1400 years. It originates from the Arabic word Kafalah, which means “guaranteeing each other” or “joint guarantee”. The concept is in line with the principles of compensation and shared responsibilities among the community.

Takaful originated within the ancient Arab tribes as a pooled liability that obliged those who committed offences against members of a different tribe to pay compensation to the victims or their heirs. This principle later extended to many walks of life, including sea trade, in which participants contributed to a fund to cover anyone in a group who suffered mishaps on sea voyages.

Takaful is commonly referred to as Islamic insurance; this is due to the apparent similarity between the contract of kafalah (guarantee) and that of insurance.

However, takaful is founded on the cooperative principle and on the principle of separation between the funds and operations of shareholders, thus passing the ownership of the Takaful (Insurance) fund and operations to the policyholders. Muslim jurists conclude that insurance in Islam should be based on principles of mutuality and co-operation, encompassing the elements of shared responsibility, joint indemnity, common interest and solidarity.

In takaful, the policyholders are joint investors with the insurance vendor (the takaful operator), who acts as a mudarib – a manager or an entrepreneurial agent for the policyholders. The policyholders share in the investment pool’s profits as well as its losses. A positive return on policies is not legally guaranteed, as any fixed profit guarantee would be akin to receiving interest and offend the prohibition against riba.

For some time conventional insurance was considered to be incompatible with the Shari’ah that prohibit excessive uncertainty in dealings and investment in interest-bearing assets; both are inherent factors in conventional insurance business.

However, takaful complies with the Shari’ah (which outlines the principles of compensation and shared responsibilities among the community) and has been approved by Muslim scholars.

Shariah Board

Shari’ah Advisory Board (SAB) of Ayady Takaful consists of prominent Shari’ah scholars and Islamic Finance experts. SAB ensures that Ayady Takaful conducts its businesses and operations are in line with rules and principles of Shari’ah.

Main Roles and Responsibilities of SAB include:
Advise Board of Directors and management on Shari’ah matters.
Endorse Shari’ah policies and procedures.
Endorse and validate relevant documentation of company.
Conduct Shari’ah review and Shari’ah audit.
Assist related parties on Shari’ah issues.
Provide written Shari’ah opinions.

Mr. Ezamshah Ismail

Sheikh Ahmed Sameer

Dr. Aishath Muneeza