Insurance in Islam: Principles, Possibilities and Challenges

Abstract

Since the early ages, the nations of the world have developed many institutions related to risk sharing and social solidarity. The most advanced of these institutions is the current insurance system. The existence of social security institutions has been known in Islamic societies since the first day. In Islamic law, there are many practices that recall insurance in the theoretical and historical context. However, its relationship with Islamic principles is questionable due to the prohibition of interest (Ribā) and uncertainty (Ribā) in Islamic finance. This article examines the conceptual and practical dimensions of insurance within an Islamic framework and examines traditional and contemporary perspectives. It also discusses other models based on Islamic values such as mudharabah model, Wakalah model and the Wakalah Waqf model.