PrecentiaTakaful is a comprehensive Takaful administrative system that caters for Wakala, Mudharabah and hybrid models. It is highly integrated systems with SOA connect certified.
The intrinsic attributes of the PrecentiaTakaful are:
It is structurally parameterized driven thus giving the freedom for users to alter the governing criterions as and when necessary. It minimizes hard coding that lead to likelihood of programming errors. Launching of new products where it used to be months away is now within a week. Each process is designed to be modular and object driven.
It is highly scalable to accommodate business expansion and growth through introduction of new distribution channels and product horizons.
Web-based in order to penetrate e-market space in immediate term.
Strong infrastructure / foundation to operate mobile commerce capabilities through PDA and SMS.
The PrecentiaTakaful system is based on PrecentiaLife architecture. It has been operational since year 1999 and has undergone numerous enhancements to cater for the changing industrial needs. Its reliability has been proven since then with the successful installation in many companies in the pacific region. The development of Takaful component has been incorporated by a highly qualified and has extensive and in-depth business knowledge in Takaful.
(d) Customer Centricity
PrecentiaTakaful has the common client capability across all lines of product and distribution to achieve customer-centric framework. It enables the users to perceive policies based on per customer. This essentially enables the system to be customer centric focus rather than certificate focus.
Segregation of Fund Business
Accounting funds structure in PrecentiaTakaful is divided into three (3) main funds; shareholders, ordinary family Takaful and investment-linked Takaful funds. The system is able to maintain new fund if it is required i.e. another main fund for annuity.
Shareholders i.e. Takaful operator acts as an agent to the participants to manage the operations of the family Takaful and investment-linked funds. Shareholders bear agency commissions and benefits and management expenses incurred in managing the funds. In return, the Takaful operator is entitled to earn wakalah fees and other charges. Hence the income plus investment income arising from investment of the assets of shareholders’ fund, and the associated expenses, are accounted for in the Shareholders’ Fund.
Ordinary Family Takaful Fund
Participants’ contribution for ordinary family products at initial stage is accounted for in Operating Fund and then allocated between investment and risk portions. Before allocation, shareholders’ wakalah fee is deducted upfront. Fund for investment is retained in Participants Investment Fund (PIF) for investment activities. On monthly basis, a portion of the fund is dripped out as ‘Tabarru’ or donation to the Participants Risk Fund (PRF) for protection. Should the Takaful operator introduce ordinary family group products; a separate risk pool is accounted for in Group Risk Fund (GRF). The money in risk funds is also invested to maximise returns. Payments out of the participants fund are restricted to direct claims and direct investment related expenses only. Inter-fund journal is created upon each transaction that crosses funds.
Investment-Linked (IL) Takaful Fund
Participants’ contribution for investment-linked products at initial stage is accounted for in IL-Operating Fund. Before units allocated, shareholders’ wakalah fee is deducted upfront. Upon creation of units, the contribution is allocated to the respective unit-linked funds. Net Asset Value (NAV) is calculated on daily basis to determine price per unit for unit creation and cancelation purposes as well for publication. On monthly basis, a portion of the fund is dripped/cancelled out as ‘Tabarru’ or donation to the Participants Risk Fund (PRF), based on actuarial calculation, for protection. The money in risk funds is also invested to maximise returns. Payments out of the participants fund are restricted to direct claims and direct investment related expenses only. Inter-fund journal is created upon each transaction that crosses funds.
Tabarru Fund Dripping
Multiple Investment Accounts
System provides flexibility for the Takaful Operators to create multiple funds for each Participant and product managed by the Operator. It also gives flexibility on the crediting of investment returns to each Participant’s accounts based on rate of return or amount to be pro-rated among the participants. Furthermore, there is flexibility on the Tabarru Fund dripping charges (see below) from these funds. Pricing and valuation module are available for each funds and accounts depending on Takaful operators’ business model. As for the Participants, they are able to view the latest information on the accumulated amount available in each accounts or funds.
Tabarru Fund Dripping Process
System provides flexibility for the deduction of the donation or Tabarru charges into the Participant’s Risk Fund from the Participant’s Fund or Participant’s Investment Account. The flexibility provided in the form of user defined Tabarru deduction schedule namely on daily, monthly, quarterly, semi-annually, yearly or lump sum based as defined by Takaful Operator at the product level following each Takaful’s Operator’s Takaful model.
The feature also caters for flexibility on the Tabarru amount to be deducted either defined as percentage of the contribution, flat amount (table based) or formula based.
Furthermore, the Operator can also define from which Participant’s accounts used to deduct for the Tabarru charges for each product. This is made possible as the system will allow for each participants at the product level to have multiple participant’s and participant’s investments account based on multiple investment arrangement such as fund being managed internally, fund being managed by external parties and funds are invested based on specific investment objectives such as Equity only.