This text is replaced by the Flash movie.
Founded in 1990
IIBI Services
Courses | Student Login
Lectures & Seminars
Executive Development
NewHorizon Magazine
Information Services
Test Your Knowledge
Islamic Banking
Upcoming Events

Takaful Islamic Insurance


What is Takaful?
Prohibitions of Gharar, Maysir and Riba
Gambling and Insurance
Basis and Principles of Takaful
Status of Takaful
Shari'ah Rulings
Glossary of Financial Terms

Retakaful or Reinsurance

Frequently, the scale of insurance risks underwritten is too great for one insurer to carry safely. In these circumstances, companies use reinsurance to mitigate their own risk exposure. When insurers insure a risk again with another company, it is called reinsurance which allows the insurance industry to spread its losses, lessening the impact of claims on any one company.
Most insurance companies have to spread their liabilities among other insurance companies, which are called reinsurance companies. The reinsurance contract, for Islamic companies, must be contracted in conformity with the Shari'ah.

There is currently a shortage of retakaful capacity and the lack of companies in the market presents a challenge as well as an opportunity. The challenge is to have a large enough takaful market to justify retakaful business. There is also a global need for strong and credible retakaful operators to assist the growth and expansion of takaful business. Shari’ah scholars have allowed takaful operators to reinsure conventionally when no retakaful alternative is available, although retakaful is strongly preferred.

However, this conventional reinsurance represents a dilemma, as it is contrary to the customer’s preference of seeking cover on Islamic principles. Structurally retakaful operating principles are similar to the takaful operating principles, and the same Shari’ah principles apply.
Preference must be given to Islamic reinsurance companies. The aim should be to end relations with conventional commercial reinsurance companies as soon as possible.

IIBI Discussion Forum
Video Presentations
Islamic banking, a value proposition employing the concept of profit and risk sharing …more
Takaful, a scheme based on the principle of shared responsibility, mutual cooperation ...more
This text is replaced by the Flash movie.
This text is replaced by the Flash movie.
Disclaimer | Privacy Policy | © IIBI