Is Takaful industry fulfilling Maqasid al-Shari'ah? The proposition of a new evaluation model using analytic hierarchy process

Purpose - The Takaful (Islamic insurance) industry operates on the principles of Maqasid al-Shari'ah, and of late, the industry has witnessed significant market growth. The purpose of this study is to develop a performance measurement model based on Maqasid al-Shari'ah to evaluate the performance of Takaful firms. Design/methodology/approach - A mixed-method research approach was adopted to conduct the present study. Priorities were assigned to various dimensions of the Maqasid model using analytic hierarchy process and by taking inputs from 18 Takaful experts. On the contrary, six experts were involved in identifying the elements and measures for the operationalization of the Maqasid dimensions. Findings - Maslaha (0.359) was found to possess the highest priority, followed by Justice (0.345) and Educating Individuals (0.295). Furthermore, under Necessity, protection of religion (0.398) and protection of life (0.388) are assigned almost similar priorities. These two are followed by the protection of progeny (0.107), protection of wealth (0.058) and protection of intellect (0.047). The final outcome of this study is a hierarchical model for the evaluation of performance of Takaful firms. Practical implications - The application of the performance evaluation model will provide information to the management of Takaful firms on where they stand in terms of fulfilling Maqasid al-Shari'ah principles. If any firms are found to have a deficiency in a certain part of Maqasid components, then proper and adequate measures can be taken to ameliorate the situation. Originality/value - It is necessary to have a performance evaluation model based upon Maqasid al-Shari'ah to evaluate the performance of Takaful firms as these firms operate on the principles of Maqasid al-Shari'ah. Because there does not exist any such model, this study fills up this gap. Details of the measures that can be used to evaluate the performance of Takaful firms are also provided.