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.
Week 1: Overview of Economic Risk
What is Risk?
Risk vs. Uncertainty
Components of Risk and Associated Terms
The Islamic Perspective of Risk
Risks Faced by Financial Institutions
Week 2: Islamic Perspective on Risk Management
Islamic Finance Products - Associated Financial Risks
Fundamentals of Enterprise Risk Management (ERM)
Enterprise Risk Management - Process
Islamic Approach to Risk Taking Vs. Risk Avoidance
Milestones in the Islamic Approach to Risk Reduction
Week 3: Principles of Islamic Risk Management
Risk Management from an Islamic Viewpoint
Risk Management Framework
Risk Management in Islamic Financial Institutions
Causes for Failures within an Organisation
Use of Hedging Instruments for Risk Minimisation
Managing Risks in Islamic Modes of Finance
Integrated Approach to Risk Management
Week 4: Legal Principles Underlying Islamic Insurance Products
Six Stages of Islamic Insurance Development
Proposed Model for Islamic Insurance Contracts
Limitations Imposed by the Sharī‘ah on Insurance Contracts
Fundamental Characteristics of Insurance Contracts
Purpose of Insurance Contracts
Generic Sources of Islamic Insurance Contracts
Specific Sources of Islamic Insurance Contracts
Ahmed Iskanderani , Azmi Omar , Khalifa M. Ali Hassanain and Yahya Aleem ur Rehman