Assessing the Viability of Implementing Mutual Company Structure in Takaful Insurance within Saudi Arabia: A Comparative Study with the United States

Abdullah Mohammed Barakat

 

Abstract: This article critically analyses the feasibility and applicability of the mutual company structure within the unique framework of Takaful insurance in Saudi Arabia. This article assesses the potential advantages and challenges associated with adopting a mutual company structure in a Takaful insurance setting that traditionally operates through a joint-stock structure. A comparative study was conducted, employing qualitative research methods. The analysis is based on an extensive review of the literature. A comparative framework was developed to evaluate governance, risk management, financial stability, and customer satisfaction. The research findings presented in this article reveal a compelling case in favour of the existing joint-stock structure in Takaful insurance within Saudi Arabia, demonstrating its superiority over the mutual company structure prevalent in the United States. The findings underscore the advantages of the existing joint-stock structure in Takaful insurance, emphasising its financial stability, effective risk management, alignment with cultural and regulatory requirements, customer satisfaction, and market adaptability. This article contributes to the existing body of knowledge by offering a comparative analysis of organisational structures in Takaful insurance, specifically in the unique context of Saudi Arabia. The originality lies in the nuanced examination of how cultural, religious, and regulatory factors impact the effectiveness of mutual and joint-stock structures.