The purpose of this paper is to offer an alternative conceptualisation of commercial insurance that is based on service thinking and compares it to the ideas flowing from goods thinking that currently appears to be a dominant mindset.
When deliberating on commercial insurance, Muslim jurists and scholars followed a misleading route of logical reasoning that is based on comparing insurance to other approved commercial contracts within Islamic Law. In this paper, the author questions such reasoning by contrasting the framework of service thinking to that of goods thinking.
The alternative framework proposed in this paper repositions commercial insurance as a unique type of service (rather than a good). It shows that commercial insurance can be seen as a bundle of benefits, which unfold in a gradual, intermittent, sporadic manner depending on the circumstances. This mode of a servicing relationship focuses on harm removal rather than the opportunistic actualisation of unfair monetary gain. Insurance premium is conceptualised as an availability fee, while compensation payout is recast as the restoration of value.
Muslim jurists and marketing practitioners can use this framework to further scrutinise the permissibility of different varieties of commercial insurance in the contexts of both Muslim and non-Muslim majority countries. As service thinking radically repositions the essence and structure of commercial insurance, the views on the relevance of “gharar” and “riba” may undergo significant re-conceptualisation. Moreover, the design of takaful options can be improved on this basis.
Service thinking can better elucidate a positive societal role of commercial insurance that is in accord with the societal and Islamic maxim of harm removal. Some objections to commercial insurance relate to public policy failures. Well-regulated commercial insurance industries can substantially contribute to the economic development of impoverished societies.
This paper exemplifies compelling power as well as potential of the discipline of Islamic marketing in contributing to significant debates concerning the permissibility of modern commercial options.
Kadirov, D. (2020), "Marketing Islamic services: tackling misconceptualisation of commercial insurance", Journal of Islamic Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JIMA-08-2019-0172Download as .RIS
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