Hannover ReTakaful provides financially sound ReTakaful solutions on all classes of Property and Casualty Business, on a treaty and facultative basis. The capacity is offered on both proportional and non-proportional basis. The main classes of business include the following:

  • Fire
  • Engineering
  • Liability
  • Marine
  • Motor and Miscellaneous Accident

Apart from the traditional Property and Casualty classes of business where the company has risk appetite for a wide array of commercial and industrial occupancies, they also provide tailor-made facultative solutions for various Casualty risks specifically relating to Professional Indemnity, Medical Malpractice, Directors and Officers and Banker’s Blanket Bond. In addition they also have the ability to provide ReTakaful support for other Specialty lines business which includes Contingency, Personal Accident and Fine Arts & Special Risks.

Family Takaful Operators are provided with Sharia Compliant ReTakaful solutions for all their products and supplementary benefits. This includes both Individual and Group Family Takaful, namely:

Individual Family Takaful:

  • Protection Plan
  • Education / Marriage  Plan
  • Investment Plan
  • Retirement Plan
  • Mortgage Plan

Group Family Takaful:

  • Group Term
  • Group Credit/Mortgage
  • Group Retirement

Supplementary Benefits:

Accidental Death or Disability, Total Permanent Disability, Partial Permanent Disability, Repatriation, etc.


Hannover ReTakaful transacts various classes of business from both P&C retakaful and family retakaful. It utilizes various types and methods of retakaful (facultative, treaty, proportional and non proportional).  As the company underwrites global retakaful business, its client base is spread across different countries with different nature and level of risk exposures.

With above facts in mind, and as agreed by its Sharia Supervisory Board, Hannover ReTakaful as the Operator maintains the following retakaful pools:

  1. General Pool
  2. Family Pool

Managing the Pools:

The retakaful business is managed via a combined model of wakala and mudharaba, taking into consideration the respective regulations in the various countries.

The basic model of retakaful is explained in Diagram 1 below:

Diagram 1: Basic model of retakaful

Diagram 1 shows how the principle of mutual help within the takaful pool is extended to the retakaful Pool.  No part of the risk is being shifted to the retakaful operator as a company, which acts as the manager of the retakaful pool.  The role of the retakaful operator is similar to that played by the takaful operator to the takaful pool.  The retakaful operator cannot claim all of the contributions payable from the takaful pool to the retakaful pool as its income.  In fact, its income is limited to the fee (wakala - depending on the model) and/or profit sharing on the investments (mudharaba).

Once participants decide to join a takaful pool, they pay a certain amount of contribution to the takaful fund for the risk they place into the pool.  This contribution is mainly used to pay claims and all other expenses arising out of the management activities of the takaful operator such as acquisition costs and administration costs.  The takaful operator is also entitled to receive a portion of this contribution as its fee.  This fee is income for the operator and is credited to its account. All claims made by the participants will be paid out of the takaful fund.

As manager of the takaful fund, the takaful operator is obliged to take all reasonable measures to ensure that the takaful mechanism amongst participants is managed in a sound and professional manner for the benefit of the participants.  It must exercise prudent underwriting so that the quality of the portfolio being managed remains sound.  It also has to invest the funds in sharia compliant investment instruments and earn a reasonable investment yield at acceptable levels of risk and diversification.

The takaful operator has to monitor the health and robustness of the takaful fund in relation to the liabilities attached to it. If, in its professional judgment, the assets available in the Takaful fund are likely to be inadequate to pay expected claims, the operator has an obligation to take proper and corrective action to resolve the issue.  Retakaful is one of the mechanisms the takaful operator will use to manage this situation. In this way, retakaful mitigates problems of capital adequacy of takaful funds, which may be particularly troublesome in the case of a new takaful fund which has not had time to build up prudential reserves to provide a solvency margin. The use of retakaful also reduces the potential dependence of a takaful fund on a Qard (interest free loan) facility from its operator.

The takaful fund must transfer a part of its fund, as a contribution to the retakaful operator.  Expenses that relate to all retakaful activities, such as claims, acquisition costs and administration costs, are paid out of the retakaful contribution received.  The retakaful operator will also receive its fee from the retakaful contribution.  By using retakaful the possibility of the takaful fund experiencing a deficit in funds that may lead to the takaful operator triggering the Qard facility is reduced. Retakaful therefore protects the takaful fund as well as the capital of the takaful operator.

The retakaful pool has the same characteristics as the takaful pool.  Given that the takaful pool is built on the basis of Tabarru (contribution) among the participants, the retakaful pool will follow this.  The retakaful pool widens the spectrum of mutual help by combining participants of many different takaful pools which are managed by different takaful operators.  Through its global nature, retakaful reduces the risk volatility across geographical boundaries.

Should the retakaful fund experience a deficit, then the retakaful operator is responsible and duty bound to grant a Qard to secure claimants’ rights to payment of claims.  It is to be noted that a retakaful operator has no obligation to support a deficit of the original takaful pool via a Qard facility, as this obligation falls under the takaful operator’s responsibility as its manager.  Similarly, the takaful operator will not be called upon to make a Qard to a retakaful fund to which it has ceded business in case of a deficit arising in that retakaful fund.