Insurance and Islam -- the challenge to Western firms

Western corporations ought to be able to offer Muslims an insurance service that is not contrary to Islamic law that at the same time yields a financial profit for the company. Insurance is a need of Muslims just as it is of the world's non-Muslims. Before the advent of Islam, insurance was practiced in the Middle East to protect tribe members from having to bear alone the cost of blood money for unplanned killings. Mutual insurance companies have traditionally been non-profit ventures. In this age, insurance companies need to balance their roles as providers of a social service and as seekers of financial gain. Muslims regard it improper to derive private benefit at the cost of the public at large. The huge resources of life insurance companies and the relatively small amount of money they pay out creates an intolerable profit margin. It is possible to draft insurance agreements with equity and risk sharing compliant with the principles of Shariah. The collective fund can ret