On the fuzzy interval equal surplus sharing solutions

PurposeThis paper deals with cooperative games whose characteristic functions are fuzzy intervals, i.e. the worth of a coalition is not a real number but a fuzzy interval. This means that one observes a lower and an upper bound of the considered coalitions. This is very important, for example, from a computational and algorithmic viewpoint. The authors notice that the approach is general, since the characteristic function fuzzy interval values may result from solving general optimization problems.Design/methodology/approachThis paper deals with cooperative games whose characteristic functions are fuzzy intervals, i.e. the worth of a coalition is not a real number but a fuzzy interval. A situation in which a finite set of players can obtain certain fuzzy payoffs by cooperation can be described by a cooperative fuzzy interval game.FindingsIn this paper, the authors extend a class of solutions for cooperative games that all have some egalitarian flavour in the sense that they assign to every player some initial payoff and distribute the remainder of the worth v(N) of the grand coalition N equally among all players under fuzzy uncertainty.Originality/valueIn this paper, the authors extend a class of solutions for cooperative games that all have some egalitarian flavour in the sense that they assign to every player some initial payoff and distribute the remainder of the worth v(N) of the grand coalition N equally among all players under fuzzy uncertainty. Examples of such solutions are the centre-of-gravity of the imputation-set value, shortly denoted by CIS value, egalitarian non-separable contribution value, shortly denoted by ENSC value and the equal division solution. Further, the authors discuss a class of equal surplus sharing solutions consisting of all convex combinations of the CIS value, the ENSC value and the equal division solution. The authors provide several characterizations of this class of solutions on variable and fixed player set. Specifications of several properties characterize specific solutions in this class.

Determining equity-linked policy premium for family Takaful: An application of Black-Scholes option pricing with escrowed dynamic model

The premium is a deterministic function to compensate for losses due to random events and it is an essential part of an insurance company operation. Numerous issues are faced by the Takaful operator in the practice of insurance, one of them is “validity of life insurance” which is still under discussion among Islamic scholars. Their conversation leads to the issue of approach which are utilised by the Takaful operator to create a sales illustration product. Based on their current discussion, there are still some hidden elements and some missing points related to the concept of loss and surplus sharing utilised by Takaful operator. Therefore, this paper focuses on the practice of Family Takaful for producing the sale illustration product which Shariah compliant. The study develops a new model of the premium for an equity-linked policy (Unit-linked product) by considering the properties of Takaful contracts namely Tabarru and Mudarabah. It aims to ensure that a new model developed can comprehensively demonstrate Shariah compliance. The model adapted and derived from the current Takaful Business Model. We add several assumptions to implicate the approach in a real problem associated with the ratio of profit-sharing (Mudarabah) and loss-sharing (Tabarru). Secondary data are used to test and produce a sales illustration product by utilising a new integrated model of the premium developed. Based on the empirical results, a new model of premium is used to create a sales illustration product that comprehensively complies with Shariah and also more profitable and beneficial when compared with a standard approach used by Takaful operator.

PENERAPAN AKAD WAKALAH BIL UJRAH PADA PENGELOLAAN PRODUK PROTEKSI KESEHATAN DI PRUDENTIAL SYARIAH CABANG SIDOARJO

ABSTRAKPenelitian ini bertujuan untuk mengetahui penerapan serta dampak akad Wakalah Bil Ujrah pada pengelolaan produk proteksi kesehatan di Prudential Syariah Cabang Sidoarjo. Penelitian ini menggunakan jenis penelitian kualitatif, dengan metode pengumpulan data menggunakan metode wawancara, observasi dan dokumentasi. Dari hasil penelitian ini dapat disimpulkan bahwa penerapan akad Wakalah Bil Ujrah pada pengelolaan produk proteksi kesehatan selain nasabah mendapatkan manfaatnya, nasabah juga dapat menolong sesama nasabah lain yang terjadi risiko sakit. Dampak penerapan akad Wakalah Bil Ujrah untuk pengelolaan produk proteksi kesehatan juga memberikan keuntungan bagi nasabah dan perusahaan sebab nasabah yang tidak mengalami klaim selama pembayaran premi, maka premi tersebut akan di kembalikan berupa surplus sharing, sehingga perusahaan tidak mempunyai beban atas premi nasabah yang tidak mengalami klaim. Kata Kunci: Akad Wakalah Bil Ujrah, Proteksi Kesehatan, Prudential Syariah ABSTRACTThis study aims to determine the application and impact of Wakalah Bil Ujrah contract on the management of health protection product in Prudential Sharia Sidoarjo Branch. This research uses qualitative research, with the method of collecting data using interviews, observation and documentation. From the results of this study it can be concluded that the application of the Wakalah Bil Ujarah contract on the management of health protection products in addition to the customer gets the benefits, the customer can also help other fellow customers who are at risk of illness. The impact of the application of Wakalah Bil Ujarah contract for the management of health protection products also provides benefits for customers and companies because customers who do not experience claims during premium payment, that the premium will be returned in the form of surplus sharing, so the company does not have a burden on customer premiums that do not experience claims. Keywords: Wakalah Bil Ujrah, Health Protection, Prudential Sharia

A Nontechnical Guide on Optimal Incentives for Islamic Insurance Operators

The takaful industry is searching for an optimal model for Islamic insurance operation, which has turned out to be a challenging task. This paper translates the abstract scientific knowledge accumulated in the optimal contracting literature into a simple, nontechnical, analytical framework to analyze alternative business models which could be used by regulators to align the best interest of shareholders and policyholders in the takaful industry. This paper shows that the wakalah–surplus-sharing hybrid serves as the optimal structure for takaful operation; in the presence of Akerlof’s (1982) gift-exchange, the wakalah fee reduces the adverse selection problem; and the wakalah fee could be used to protect infant takaful operators.

Pay-What-You-Want in Competition

This paper presents an analysis of Pay-What-You-Want (PWYW) in competition which explains its entry and limited spread in the market. Sellers choose their pricing schemes sequentially while consumers share their surplus. The profitability and popularity of PWYW depend not only on consumers’ preferences, but also on market structure, product characteristics and sellers’ strategies. While there is no PWYW equilibrium, given a sufficiently high level of surplus-sharing and product differentiation, PWYW is chosen by later entrants to avoid Bertrand competition. The equilibrium results and their market characteristics are consistent with empirical examples of PWYW.

Surplus Sharing with Coherent Utility Functions

We use the theory of coherent measures to look at the problem of surplus sharing in an insurance business. The surplus share of an insured is calculated by the surplus premium in the contract. The theory of coherent risk measures and the resulting capital allocation gives a way to divide the surplus between the insured and the capital providers, i.e., the shareholders.