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Working in an actuary firm

Answered according to Hanafi Fiqh by Daruliftaa.com

Is it permissible for an individual to work in an actuary firm, and, more generally in an Insurance company? Which area in finance would you recommend a Muslim to work in?

ANSWER

In the name of Allah, Most Compassionate, Most Merciful,

If one’s job in an actuary firm entails calculating insurance premiums, calculating risks and costs of insurances, providing advice and other statistical information on insurances and basically making the technical calculations required for the pricing of insurance policies, then it will not be permitted to take up that job.

Sayyiduna Abd Allah ibn Mas’ud (Allah be pleased with him) narrates that the Messenger of Allah (Allah bless him & give him peace) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it. (Sunan Abi Dawud, number 3327)

As explained in many earlier answers, all prevalent forms of commercial insurance are unlawful, as they involve Riba transactions in one way or another. To be directly involved with interest-based transactions is not permitted, and as such, advising on insurance policies will not be permitted.

Then there is also the aspect of the source of one’s income that needs to be considered. If the firm pays one’s salary from the profits it makes through the sale of insurance policies, it will not be Halal for one to take that salary, as the company would have made this profit through unlawful means.

Therefore, generally employment in an insurance company must be avoided, as explained in many previous answers.

If one is unemployed and has to support his dependants, then one will be excused until an adequate alternative job is found. Many scholars have permitted to continue working and using the income for the needs of oneself and one’s family until one finds a suitable job. At the same time one must seek forgiveness from Allah Most High for one’s actions and pray to Him to extract him from this sin.

Note that if the job in an actuary firm is not connected to insurance policies but rather it consists of applying financial analysis to a wide range of business problems, then it would be permitted provided there is no other reason of prohibition.

And Allah knows best

[Mufti] Muhammad ibn Adam
Darul Iftaa
Leicester , UK

This answer was collected from Daruliftaa.com, which is headed by Mufti Muhammad ibn Adam Al-Kawthari. He’s based in the United Kingdom.

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