Utkal Historical Research Journal, ISSN : 0976-2132 Vol.-34, 2021 ฀ 190 A STUDY ON THE GROWTH OF THE TAKAFUL INSURANCE SYSTEM (ISLAMIC INSURANCE) IN SELECT COUNTRIES Ashish C Pius Ph.D. Research Scholar, Karpagam Academy of Higher Education, Coimabatore Dr.R.Velmurugan Associate Professor in Commerce, Karpagam Academy of Higher Education, Coimbatore ABSTRACT Islamic Insurance (Takaful) is a type of Insurance that follows Islamic Shariah. Mutual cooperation, uniform interest, and shared responsibility are the major features of the Takaful Model. This present study has been carried to analyze the performances of the Takaful insurance business in select countries like Saudi Arabia, Iran, Indonesia, Malaysia, and Iran. In 2019, Gulf countries are the major contributors (74%) of the Takaful insurance. Takaful insurance having a huge opportunity in Indian Insurance System, as India is the second-largest country in the world regarding Muslim population. Keywords: Insurance, Takaful, Islamic Insurance, INTRODUCTION Takaful insurance business model first introduced in Sudan (1979), soon Gulf counties have followed this model. More than 260 companies are selling Takaful products in 32 countries. Takaful follows cooperative principles, sharing the risk by its customers through mutual cooperation. As this business follows Islamic Shariah, it uses some Arabic terms in its operations. The Arabic term Takaful means commonness and sharing among a group of people. Sharing business profit and loss is the unique feature of Takaful insurance model from conventional insurance model. In Takaful business Insured is called participant and Insurance Company is called Takaful fund operators. SIGNIFICANCE OF TAKAFUL Investment avenues and financial services which follow Shariah are rapidly gaining popularity among Muslims. A major chunk of Muslims averted from conventional Insurance, as conventional insurance is not following Shariah Principles. Takaful insurance offers numerous benefits and services like conventional Insurance. The faith-based consumers who have the surplus fund for investment and risk coverage can choose Takaful business. Takaful businesses growing rapidly in not only in Muslim countries but also in non Muslim countries like Australia, UK, and USA. TAKAFUL MECHANISM In Takaful insurance customers (policyholders) are contributing voluntarily, their contributions are treated as donations. The Takaful insurance company is pooling this donation into a common fund called Takaful Fund. Members are sharing losses and surplus equally. These companies operate and manage funds on behalf of its members. The company is operating without prior expectations of stable returns. Profit-making is not a primary objective of Takaful Company. TAKAFUL V\S CONVENTIONAL INSURANCE Takaful and conventional insurance are differentiated in their operations and management. Shariah Principles are strictly managed in Takaful Insurance. The concept and Principles of