INSURANCE BUSINESS MODELS UNDER ISLAMIC LAW AND PARTICIPATION INSURANCE

Abstract

The share of the insurance sector in Turkey is gradually increasing and gaining importance. One of the alternative systems to the traditional insurance is the participation insurance, whose attention is constantly increasing both in the world and in Turkey. The concept of Islamic insurance and/or participation insurance has started to become widespread in the sector, particularly in recent years, similar to participation banking. One of the main reasons for this is the sensitivity and demand of individuals towards interest-free products. Participation or Takaful insurance is the focus of the study. Although the participation insurance practices have a history of more than 40 years in the world, it is relatively new in the Turkish insurance sector. However, it is obvious that participation insurance will show great improvement in Turkey in the future. In the study, Iranian, Pakistani, Saudi Arabian, Takaful and Turkish models, which are insurance business models within the framework of Islamic Law, are mentioned. The most used Takaful model in the research is Hybrid and the country with the highest premium production in participation insurance business is Saudi Arabia, which implements the cooperative model. At the end of this study, various suggestions were made for the further development of participation insurance.