Working for Insurance Companies: Allowed?

28 February, 2017
Q As-salamu `alaykum. I am near the completion of my university degree and I am intending on working in the actuarial profession. Actuaries are hired in all types of insurance companies, consulting companies and pension companies. From what I have researched pension companies seem to be the area least under dispute. Even so it would be unlikely that upon landing my first career job, I would find a pension company that is involved in fully halal (permissible) transactions. My questions are: 1) Would it be possible to work as an actuary in a traditional insurance company, and if not in all, then which ones? 2) Would it be possible to work for a consulting company even if some of its employment comes from insurance companies and traditional Western banks? 3) Is it halal to work as an actuary in a pension company? Jazakallah khair.

Answer

Wa`alykum As-Salamu wa Rahmatullahi wa Barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear brother in Islam, we would like to thank you for showing keenness on knowing the teachings of Islam, and we appreciate the great confidence you have in us. We hope our efforts meet your expectations.

Regarding your question, working as actuarial for insurance companies is permissible, and the income derived from this work is halal (lawful).

In response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:

Insurance itself is not unanimously prohibited. Great scholars of the caliber of the late Sheikh Mustafa Az-Zarka (died 1999) believed it is permissible if there is no interest clause in the contract. Actuarial studies are useful for insurance and pensions and they are used all over the Muslim world. It is just happened that those contemporary scholars who argued for its prohibition are not exposed to the needs of contemporary life, in industry, trade, transportation, urban living, health, and life insurance.

Anyway even those scholars, who believe that insurance offered by profit-making companies is in sharp contrast to the one offered by mutual or cooperative companies, do not consider working in such companies a prohibited action. Sheikh Muhammad As-Siddiq Ad-Darir of Sudan, a leading international Shari`ah scholar, who goes against commercial insurance and obviously against interest, argues that working for an interest-based bank is permitted as long as one avoids being a signatory of an interest-based contract, its writer or its signing witness. By analogy, the matter with insurance companies is the same, and it is permissible to work for an insurance company, as long as you are not the person who signs the contract on behalf of the company.

In brief, I happen to be an admirer of the opinion of Az-Zarka. By the way, the late Mawdudi has similar opinion, and I believe that insurance is permissible as long as it is void of an interest clause. Working as actuarial for pension companies is permissible, so also is working as actuarial for insurance companies, and the income derived from them is halal (lawful).”

Allah Almighty knows best.