Surplus Distribution Policies In Takaful Insurance

Abstract

This study provides an analysis of the surplus distribution policies of the First Insurance Company in Jordan, within the framework of transparency, operational efficiency, and compliance with Islamic Sharia principles over the period 2015–2023. The research employs both quantitative and qualitative analytical methods, drawing on official financial data and annual reports, and develops a composite indicator the Takaful Efficiency Index (TEI to assess the company's ability to convert contributions into distributable surpluses. The findings reveal significant fluctuations in performance: while the company demonstrated relative effectiveness in surplus management between 2017 and 2021, a decline in the TEI was observed thereafter, despite continued growth in contributions. This suggests potential shifts in operational policies or rising technical costs. The study also identifies a transparency gap in the disclosure of surplus calculation and distribution mechanisms, limiting the ability to assess fairness and efficiency. Accordingly, the study recommends integrating performance indicators such as the TEI into decision-making processes, enhancing financial disclosure and governance practices, and refining surplus distribution models to align more closely with the social justice objectives of the Takaful system. These findings contribute to academic and professional discourse on Takaful efficiency and offer pathways for developing standardized tools for performance evaluation in this critical sector