Commercial vs. Cooperative Insurance (Concept and Operational Framework)

  • Zahoor Khan
  • Muhammad Rafiq
  • Amjid Amin
  • Asmat Ullah


This paper is an attempt to evaluate theoretically the views of Shariah scholars regarding contemporary insurance practices and its Shariah alternatives. The Shariah scholars' views have divided into two different extremes i.e. no concept of insurance in Islam and conventional insurance is valid in Islam. After lengthy discussions and debates a consensus emerged among the scholars that although the nature and objectives of insurance is not contradictory to Islamic principles however, the present form of this business involves elements of interest. uncertainty, gambling etc. which are strictly prohibited in Islam. Islamic insurance (Takaful) unlike the conventional insurance was suggested as substitute for contemporary insurance. On the basis of this suggestion many Takaful companies have been established and running their business quite successfully in various countries such as Malaysia, Bahrain, Sudan, Pakistan etc. By using wakalah-waqf model of Pak-Kuwait Takaful company Pakistan limited, comparison has been made to show similarities and dissimilarities between Islamic and conventional insurance. Finally, we may conclude that the concept of insurance is not contradictory to Shariah if refined, by removing undesired elements of Riba, Qimar and Gharar.
How to Cite
KHAN , Zahoor et al. Commercial vs. Cooperative Insurance (Concept and Operational Framework) . Business & Economic Review, [S.l.], v. 2, n. 2, p. 6-12, apr. 2010. ISSN 2519-1233. Available at: <>. Date accessed: 19 may 2022.