A strategic narrative exploring the implementation of Bank Negara Malaysia's 2025 Policy Document on Ta'awun and the Value-Based Intermediation (VBIT) framework for community resilience and financial sustainability.

The Legacy Ledger

The rain in Kuala Lumpur didn’t just fall; it hammered.

From the 35th floor of Menara Nusantara, Aiman watched the grey sheets of water obscure the Petronas Twin Towers. The rhythmic drumming against the glass matched the anxious tapping of his pen against the boardroom table.

"It’s dead money, Aiman," Mr. Razak said, his voice gruff. Razak was the Chief Financial Officer of Nusantara Takaful, a man who viewed the world through the binary lens of profit and loss. He tapped a thick, leather-bound ledger that sat in the center of the table like a relic. "The fund has been closed for three years. The participants are gone. The liabilities are settled. We should dissolve the surplus into the shareholder’s fund and be done with it."

Aiman straightened his tie, feeling the weight of the room’s gaze. At thirty-two, he was the youngest Head of Strategy in the company’s history, a position he’d earned not by toeing the line, but by seeing lines where others saw walls.

"With respect, Mr. Razak," Aiman began, his voice steady. "It’s not dead money. It’s Orphan Surplus. And under the new framework, it’s a seed."

He pressed a button on his laptop, and the projector hummed to life, displaying a document title that had sent ripples through the industry just weeks prior: Policy Document on Broader Application of Ta'awun in Takaful, issued by Bank Negara Malaysia in November 2025.

"The central bank has shifted the paradigm," Aiman said, gesturing to the screen. "For decades, we’ve operated on a closed-loop system. A group of people pool their money; we pay the unlucky ones, and we refund the surplus to the lucky ones. It was a club. But the new policy challenges us to look beyond the club. It explicitly allows for the Broader Application of Ta'awun. We can use this surplus not just to enrich ourselves, but to build resilience in the community that sustains us."

Razak leaned back, crossing his arms. "Charity? We are a financial institution, Aiman, not an NGO. The shareholders expect returns."

"This isn't charity," Aiman countered, his eyes flashing. "It’s Value-Based Intermediation. It is the landmark approach that this industry promised to adopt five years ago. We promised to deliver impact, not just income. If we take this surplus and invest it in flood mitigation for the communities in the East Coast—communities that make up 40% of our future market base—we aren't just giving money away. We are reducing future claims. We are building brand loyalty that no marketing budget can buy. We are proving that Takaful is what we say it is: mutual assistance."

The room fell silent. The storm outside raged on, a grim reminder of the very risks they were discussing.

The Spirit of 1984

Later that evening, Aiman sat in a small mamak stall in Kampung Baru, the steam from his teh tarik rising into the humid night air. Across from him sat Uncle Hisham, a retired agent who had sold some of the very first Takaful policies in Malaysia back in the mid-80s.

"You look like you're fighting a war, son," Hisham said, tearing a piece of roti canai.

"Just a boardroom skirmish," Aiman sighed. "They want to treat the Orphan Surplus like typical corporate profit. I’m trying to convince them to use the new Ta'awun policy to fund a community resilience project in Kelantan. Solar-powered flood warning systems and micro-takaful coverage for farmers who can't afford premiums."

Hisham smiled, lines wrinkling around his eyes. "You know, when we started this industry in 1984, it wasn't about 'products'. It was about Ukhuwah—brotherhood. We told people, 'You put one ringgit in, your brother puts one ringgit in, and if your house burns down, your brother helps you rebuild.' It was simple. It was beautiful."

He took a sip of tea. "But then, we got successful. We got complicated. We started talking about 'underwriting profit' and 'surplus distribution ratios'. We forgot the Ta'awun part. We forgot the mutual help."

Aiman nodded. "That's exactly what this new document is trying to fix. It defines Ta'awun not just as help among the participants in the pool, but as a responsibility to society at large. It says that if there is money left over that belongs to no specific person—this Orphan Surplus—it is ethically better to use it for the common good than to just absorb it."

"But Razak doesn't see it that way," Hisham guessed.

"Razak sees a compliance checkbox," Aiman said. "I see a chance to make the Value-Based Intermediation (VBIT) framework real. VBIT was the landmark shift—it told us we need to generate positive impact. This new policy is the tool to do it. If I can't bridge that gap for them, the project dies."

Hisham leaned in. "Then don't sell them on the charity. Sell them on the survival. Show them that in a world of climate crisis, a Takaful operator that doesn't actively reduce risk is a Takaful operator that will go bankrupt."

The Proposal

The following week, the boardroom was colder, the air conditioning cranked up to combat the tropical heat. Aiman stood at the head of the table again. This time, he didn't just have slides; he had data.

"In 2024, flood claims cost the industry nearly half a billion Ringgit," Aiman started, skipping the pleasantries. "Nusantara Takaful absorbed 15% of that. Our actuarial projections show that with current climate trends, that number will double by 2030."

He clicked the remote. A map of Kelantan appeared, overlaid with heat maps of flood risk.

"This is Kampung Pasir Pekan. It floods every year. The residents have zero coverage because they are 'uninsurable' by our current standards. When they lose their crops, they fall into poverty. They stop buying goods. The local economy shrinks. Our potential market shrinks."

He clicked again. The screen showed a diagram of a new ecosystem.

"Using the Broader Application of Ta'awun, specifically leveraging the Orphan Surplus from the legacy 'Barakah 2010' fund, I propose we launch 'Project Payung'. We use the surplus to install early warning sensors in the river upstream. We subsidize a micro-takaful scheme that pays out instantly upon a flood trigger—no adjusters, no delays."

Razak scoffed. "And the return on investment?"

"The return is three-fold," Aiman said, his voice firm. "One: Risk mitigation. The sensors give residents time to move assets to higher ground, reducing the total economic loss by an estimated 40%. Two: Market penetration. We are onboarding 5,000 new customers who will eventually graduate to full Takaful products as their economic stability improves. Three: Differentiation."

Aiman paused for effect. "The document explicitly encourages innovation in operational models. If we do this, we become the first operator to fully utilize the November 2025 policy. We align ourselves with the VBIT agenda, the landmark approach that Bank Negara and the global Islamic finance community are watching. We stop being a company that sells insurance, and we start being a company that ensures survival."

The CEO, who had been silent until now, looked up from the policy document she had been reading. Her eyes narrowed. "Section 10 on Governance and Oversight says we need a robust mechanism to ensure this doesn't disadvantage existing participants. How do you answer that?"

"The Orphan Surplus has no claimants, Puan," Aiman answered immediately. "The participants of that fund have all been paid or their policies lapsed years ago. By channeling this specific capital into 'Project Payung', we are not touching the funds of current participants. We are fulfilling the fiduciary duty of the operator to manage the industry's reputation and sustainability."

The CEO closed the folder. The room held its breath.

"Razak," she said softly. "Run the numbers on the brand equity lift. Aiman, draft the submission to the Shariah Committee. If they bless it, we move."

The Deluge

Three months later, the monsoon arrived with a vengeance.

Aiman was in the Operations Center, a room filled with screens monitoring weather patterns. His phone buzzed incessantly. 'Project Payung' had gone live only four weeks prior. The sensors in Pasir Pekan were blinking red.

"River levels at critical," a technician called out. "Trigger point reached."

In the old world, this would be the moment Nusantara Takaful braced for impact—for the inevitable flood of claims and the arguments over what was covered.

But this was the new world.

"Execute the payout," Aiman ordered.

Instantly, the system authorized the transfer of micro-payments to the digital wallets of the 3,500 registered villagers in Pasir Pekan. It happened before the water even breached the banks.

On the main screen, a live feed from a drone showed the village. But instead of the usual chaos, Aiman saw organized movement. The villagers had received the sensor warnings to their phones two hours ago. They were moving livestock to the designated high-ground shelters built with the surplus funds. They were lifting motorbikes onto platforms.

Because the payout had arrived before the disaster peaked, they had the cash to hire lorries to move their goods. They weren't helpless victims waiting for a check; they were empowered participants in their own rescue.

By the next morning, the floodwaters had receded. The damage assessment came in.

"Economic loss in Pasir Pekan is down 60% compared to the 2024 flood," the analyst reported, sounding stunned. "And because they saved their assets, the community is already back to work. We’ve received zero complaints. In fact..."

The analyst put a social media feed on the screen. It was trending. #NusantaraPayung. Videos of villagers thanking the company not for a payout, but for the warning and the "brotherly help" that arrived when it mattered.

Aiman slumped into his chair, exhausted but exhilarated. He pulled up the policy document on his tablet one last time.

The Ripple

A week later, Aiman stood on the muddy bank of the river in Pasir Pekan. The sun was out, and the village was bustling. He watched as a group of children played near the newly reinforced bunds.

Uncle Hisham stood next to him. "You did good, Aiman."

"We did good," Aiman corrected. "The system worked."

"You know," Hisham said, looking at the water. "When we wrote those first policies in the 80s, we dreamed of this. We dreamed that Takaful wouldn't just be a contract, but a pact between people to keep each other safe. For a long time, the business got in the way of the dream. But this..." He gestured to the village. "This is the business serving the dream."

Aiman nodded. The Orphan Surplus hadn't been dead money after all. It had been potential energy, waiting for the right framework to release it. The policy document had provided the key, but the Ta'awun—the spirit of mutual assistance—had provided the power.

As he walked back to his car, Aiman knew this was just the beginning. The success of Project Payung would force the rest of the industry to adapt. The ripple started here, in a muddy village in Kelantan, but it would spread. The landmark approach of Value-Based Intermediation was no longer just a theory in a whitepaper; it was a reality in the mud and the rain.

The ledger was finally balanced, not just in Ringgit and Sen, but in hope and dignity.

References:

1. Bank Negara Malaysia. (2025). Policy Document on Broader Application of Ta'awun in Takaful (pd-taawun-nov25). Retrieved from https://www.bnm.gov.my/documents/20124/948107/pd-taawun-nov25.pdf
2. Landmark Approach: The story references the Value-Based Intermediation for Takaful (VBIT) framework. Introduced by the industry in collaboration with Bank Negara Malaysia, VBIT is considered a landmark approach that shifts the industry's focus from mere Shariah compliance to generating positive, sustainable impacts for the economy, community, and environment. It serves as the philosophical foundation for initiatives like the Broader Application of Ta'awun.