Abu Eesa at his new blog Alternative Entertainment has some thoughts on insurance. He makes the usual distinction made by the scholars between mutual insurance (permissible) and commercial insurance (generally considered to be impermissible) and then proceeds to discuss some of these objections.
Leaving aside the question of whether commercial insurance is or is not permissible, the fact remains that mutual insurance is generally allowed. As Islamic Law, etc. posted some time ago, mutual insurance can be broadly defined as follows:
On the other hand, they allowed mutual insurance. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. A mutual company is, in the simplest terms, where all parties are members of an insurance ‘guild’ contributing to the ‘pot’. These contributions are charitable in nature and are seen as the the collective right of the guild, in which everyone agrees that if one member is faced with adversity or some loss that the money collected will be used to offset that loss.
Although the trend seems to be towards demutualisation, Australia and other Western societies do have mutual insurance companies offering a variety of consumer and business insurance products. The now demutualised AMP is one well known example, but there is also Australian Unity who continue to be mutualised.
As we have written many times before on this site, it is shameful that despite having been in this country for so many decades, we have been unable to even verify the permissibility of these existing products and structures, let alone come up with new ones (if required). This is not to say that Australian Unity or the other mutual insurance companies are offering a halal product (that requires further investigation) but certainly it would be useful for those with the requisite knowledge in our community to look at some of these existing products and structures rather than simply denounce insurance as haram (forbidden) and offer no alternative to the people.