The solvency margin in takaful insurance and takaful reinsurance companies

Abstract

The solvency margin is an important financial indicator and a key benchmark for industry regulators. It measures an insurance company's ability to pay out claims when unforeseen events occur, such as a natural disaster or a stock market collapse. In the last few decades, much attention has been paid to the necessary solvency margin, and for that reason, our research aims to measure the solvency margin of 6 Saudi takaful insurance and reinsurance companies in accordance of the Saudi Arabia Monetary Authority guidelines.