Insurance under Islamic law and its development in Saudi Arabia

Running Head : Islamic Insurance

Islamic Insurance

[Name of Writer]

[Name of Institution]

Islamic Insurance

Introduction

The term insurance is used in economics to denote the protection of people , property , and assets against damage and destruction . Insurance is provided by organizations to individuals in the event of accidents death , criminal activity , or incapacitation . A certain amount of compensation is paid which depends upon the type and conditions of the insurance scheme . The concept of insurance under Islamic law has changed as compared with the conventional view of insurance . The

conventional form of insurance is viewed as being incompatible with Islamic law and principles . This provides a background of conventional insurance and Islamic concepts of insurance . It highlights the differences between conventional insurance and Islamic insurance . Finally it tracks the development of Islamic insurance in the Kingdom of Saudi Arabia

Conventional Insurance

Insurance is concerned with the principle of providing safety and protection to individuals in to mitigate or reduce the risks faced from incapacitation , death , injury , or loss from criminal activity . A percentage is provided to the person so as to minimize or reduce their losses . Insurers are companies which offer various types of insurance schemes . Insurance rate is the percentage which is calculated between the payment offered by the company and the insurance coverage . Insurance policies in the United States of America and Europe can offer similar policies to a large number of individual members (Warde , 2000 . This can include the use of automobile insurance policies for huge...