Differences in Perspectives between Islamic and Conventional Insurance: An Argumentative Analysis based on Risk-sharing and Risk-transfer Concept

This article presents an argumentative analysis comparing conventional insurance and Takaful, a segment of Islamic insurance system. The objective of the study is to evaluate both systems from justice, economic, risk, moral, and refund policy perspectives. It focuses primarily on Takaful, a risk-sharing insurance that is considered more viable than conventional insurance in terms of demonstrating compliance with the five sample indicators. Despite some limitations, the study argues in favor of Takaful because its limitations are mostly individual, not institutional in nature. There is a significant and higher growth of Takaful than conventional insurance, and it has the potential to become a significant player in the global insurance market. The research adds significant value to the existing literature on Islamic finance and insurance through its evaluation of Takaful and conventional insurance.