Principles and Practices of Islamic Insurance

This course will provide students with an advanced understanding of Islamic insurance or “Takaful.” Practices that resemble modern-day insurance date back centuries. The Islamic practice of Takaful originated among ancient Arab tribes. It functioned as a pooled liability that required offenders from one tribe to pay compensation to the victims (or their heirs) of another. Takaful has since evolved to include many forms and plans needed in Modern society while still meeting the approval of Muslim scholars.This course begins with an introduction to insurance and risk management. You’ll explore the Islamic perspective on insurance and risk, risk identification, and measurement. From there, you’ll review tools of risk management, risk avoidance, and risk financing, as well as insurance as a risk financing tool. You’ll take a closer look at specific Islamic finance products, as well as perspectives on risk taking versus risk avoidance and note milestones in the Islamic approach to risk reduction. Finally, you’ll explore the six stages of Islamic insurance development and examine insurance contracts – their purposes, limitations, and sources.