ROHAIL ALIKHAN, General Manager, Takaful Pakistan Limited
Dec 04 - Dec 10, 2006

"An Islamic alternative to a conventional insurance program based upon a Shariah compliant, approved concept"

The word Takaful is derived from the Arabic verb Kafala, which means to guarantee; to help; to take care of one's needs.

Takaful is a system of Islamic insurance based on the principle of Ta'awun (mutual assistance) and Tabarru (voluntary contribution), where the risk is shared collectively by the group voluntarily. It is a pact among a group of members who agree to jointly guarantee themselves against loss or damage to any one of them as defined in the pact.

Takaful is operated on the basis of shared responsibility, brotherhood, solidarity and mutual cooperation or assistance, which provides for mutual financial security and assistance to safeguard participants against a defined risk.

Takaful operations must be within the spirit of the Shariah and there is no justification to involve therewith any element which contravenes Shariah principles.


There are numerous references to Ta'awun and Takaful in the Quran in the context of co-operation and solidarity for the good of society. One widely quoted reference is from Surah al-Maidah, as follows:

"And help one another in righteousness and piety and do not help one another in evil deeds and enmity" (Al Quran: Al Maidah 2)

Islam aims at establishing a social order under universal brotherhood. The underlying concept is that of mutual co-operation and help. The Prophet (pbuh) stressed:


"In mutual compassion, love and kindness you will find the faithful like a body, so that if one part feels pain, the whole body responds with wakefulness and fever." Sahih Muslim

"A Muslim is the brother of another Muslim; he neither wrongs him, nor leaves him without help, nor humiliates him" Sahih Muslim

Other references to Ta'awun and Takaful in the Quran are as follows:


"(Allah) who prepares nourishment to prevent the fear of hunger and saves / puts at peace those who fear" (Al Quran: Al-Quraish, 106:4)


A Muslim is the brother of a fellow-Muslim. He should neither commit oppression upon him nor ruin him and he who meets the needs of a brother, Allah would meet his needs and he who relieves his brother from hardship, Allah will relieve him from the hardships to which he could be put on the Day of Resurrection. Sahih Muslim

Given the Quranic admonition to "assist one another" and the words of the Prophet Muhammad (PBUH) regarding mutual assistance, Takaful may be understood as an imperative upon Muslim believers:

"... a system based on solidarity, peace of mind and mutual protection which provides mutual financial and other forms of aid to Members {of the group} in case of specific need, whereby Members mutually agree to contribute monies to support this common goal." O.Fisher

Finally, although a believing Muslim is required to accept (destiny or pre-ordainment) which can incorporate misfortune, s/he is not a passive "victim of circumstances. Conversely, the believing Muslim is exhorted by the injunctions of the Holy Quran to proactively take precautions in order to minimize potential misfortune, losses or injury from unfortunate events. One specific such instruction appears in Hadith to the owner of the camel to first tie your camel then rely upon the destiny ordained by Allah (SWT).[Al Tirmidhi Vol.4,p.668].


There are several examples in pre-Islamic history whereby families, tribes or related members throughout the Arabia peninsula pooled their resources as a means to help the needy on a voluntary and gratuitous basis. There practices were validated by Prophet Muhammed (PBUH) and incorporated into the institutions of the early Islamic State in Arabia around 650 C.E.

Examples of these early Islamic practices include the following:

* Merchants of Mecca formed funds to assist victims of natural disasters or hazards of trade journeys.

* Surety called Daman khatr al-tariq was placed on traders against losses suffered during a journey due to hazards on trade routes.

* Assistance was provided to captives and the families of murder victims through a grouping known as A'qila.

* Contracts, called 'Aqd muwalat, were entered into for bringing about an end to mutual amity or revenge.

* Confederations were brought about by means of a Hilf, or agreements for mutual assistance among people.


The Majority viewpoint by contemporary Islamic scholars is that Takaful (cooperative insurance) is fully consistent with Shariah principles. This perspective is upheld by numerous meetings and resolutions:

* Council of Saudi Ulama (1397 AH/1977 CE) resolution
* Fiqh Council of Muslim World League (1398/1978) resolution
* Fiqh Council of Organization of Islamic Conference (1405/1985)
* Islamic Fiqh Week Conference, Damascus 1961
* Second Conference of Muslim Scholars, Cairo 1965
* Symposium on Islamic Jurisprudence, Libya 1972
* First International Conference on Islamic Economics, Mecca February 1976
* The Islamic Conference, Mekkah, October 1976

The esteemed Shariah Advisory Board of Takaful Pakistan Limited confirms also its viewpoint and whole heartedly endorses the General Takaful Programs now offered by Takaful Pakistan.