Purpose This study on corporate demand for general takaful (Islamic insurance) aims to identify potential growth areas and areas for improvement in takaful business practices in Malaysia. Design/methodology/approach A survey on corporates protection needs, takaful/insurance coverage obtained and awareness on takaful/insurance was conducted for this paper. Findings The findings from the survey are as follows: There is potential for takaful operators to further penetrate the corporate sector, as the majority of respondents indicated willingness to spend on takaful/insurance. Emphasis on takaful value propositions apart from its Shari'ah compliance status is needed to attract corporates, as respondents were found to be indifferent on Shari'ah compliance status of their protection. Strong market presence, expanded product offerings and efficient services were key determinants to attract takaful subscription. Respondents heavy reliance on intermediaries warrants strong collaboration with intermediaries to widen market outreach. The small and medium enterprises segment appeared promising, as it is found to be underserved despite having higher propensity to obtain takaful/insurance coverage compared to the overall respondents. Research limitations/implications This study is limited to Malaysia's experience. The findings are indicative (though they may not be conclusive) of the target segment as well as the takaful industry as a whole. Originality/value The insights on respondents considerations when obtaining takaful/insurance coverage and the correlation of these factors with respondents characteristics can assist takaful/insurance providers in structuring products and business strategies to better serve this market segment. The paper may also aid discussions among researchers and regulators on areas for further development of the industry.

In takaful (Islamic insurance), surplus in the takaful fund will emerge when the overall operations of the fund perform better than expected, i.e. when the underwriting, investment and expense management yield favourable results. Surplus, in general, refers to the excess amount of contributions available in the takaful fund after taking into account total claims paid, amount payable for retakaful contributions, reserves allocated and investment profits accrued to the fund. Given the rightful roles of takaful operators as ‘managers’ of the takaful fund and participants as owners of the fund, this paper discusses the current practice of surplus management and distribution, including the application of the surplus-sharing concept, among takaful operators in Malaysia. The study combines both qualitative and quantitative research methods and relies greatly upon availability of disclosures on the surplus distribution practice by takaful operators. The paper also sets out to establish the effectiveness of the existing practice in promoting a strong and sustainable takaful fund, upholding participants’ stature as owners of the takaful fund and enticing consumers to participate in takaful, as well as identifying the areas within the practice that can be improved to further enhance the feature and value proposition of surplus in takaful. The study affirms that, in actual practice, the surplus generated from the takaful fund is distributed between participants and takaful operators, with variation seen from the perspectives of frequency of distribution, method of distribution and specific Shari'ah contracts used to underlie the distribution. Several improvements on the disclosures of information on surplus are also suggested in the paper.