Implementing Smart Contracts in Takaful : Boosting Efficiency and Transparency

Existing Islamic insurance (Takaful) models, while grounded in community support and ethical principles, struggle with cost inefficiencies, operational hurdles, and a lack of transparent transactions. This research aims to address these shortcomings by proposing a decentralized Takaful (D-Takaful) system. This system leverages blockchain technology and Non-Fungible Tokens (NFTs) to enhance the efficiency and transparency of Takaful operations.

The study adopts a qualitative approach to gain a comprehensive understanding of the current landscape of the global Takaful industry. This includes exploring existing trends, identifying key challenges, and evaluating the potential for innovation using blockchain and NFTs. The PASTEL and SWOT analyses are employed to assess the proposed D-Takaful model.The findings of this research have significant value to various stakeholders. Regulators can leverage the insights to formulate effective policies for D-Takaful implementation. Practitioners and market participants can gain a deeper understanding of how blockchain and NFTs can revolutionize Takaful operations, potentially improving efficiency and transparency. Academicians can benefit from the exploration of a new frontier in Islamic finance, enriching the body of knowledge in this domain.

The successful development and implementation of the D-Takaful system has the potential to significantly improve the Islamic insurance industry. Increased efficiency can lead to cost reductions and wider accessibility of Takaful products. Enhanced transparency can foster trust and confidence among policyholders. This research paves the way for further exploration and development of D-Takaful, potentially transforming the Takaful market globally.