Comparative study between Islamic insurance and conventional insurance in Sri Lanka

Abstract

Insurance is an important risk management tool that widely used in business and financial enterprises for a long period of time. Takaful has been introduced as an alternative mechanism of risk management complying with Islamic law and eliminating the controversial aspects of conventional insurance practices. The study was conducted to analyze the participants on the Takaful concept and how they differentiate Takaful from conventional insurance. A mixed method of qualitative and quantitative was applied in this survey for the statistical analysis. The study identified that most of the participants knew that Takaful is a Shari’ah compliant insurance but a significant number of participants don’t aware of the risk-sharing the technique of Takaful. These key findings show that Takaful has been well accepted by the industry as well as people regardless of their religious faith. But Most Takaful users don’t aware of the fundamental difference between Takaful. Thus, there is a need to educate all Takaful clients, especially educating Muslim participants is necessary as it is their religious requirement to know their deals and deeds.