Answered by Mufti Muhammad ibn Adam
Question: 1. If i pursue an actuarial career, I will be limited to working in takaful companies. However, scholars differ on what is permissible and impermissible in this regard. As I Hanafi, am I limited to working at a takaful company that have Hanafi scholars on their shari`ah board? 2. If I pursue an actuarial career, I would have to work with a conventional insurer first. Would this be permissible if my intention is to change to a takaful company as soon as I get a chance? 3. Due to the all these issues, I’ve though of switching to the field of chartered accountancy. I’ve read that Mufti Taqi permits external auditing. Do you feel it is best for me to switch fields? 4. Many Islamic finance professionals state that Islamic finance is not perfectly halal, but I should join in order to fully make it halal. Islamicly, is taking this view point correct (i.e. to earn income which isn’t strictly halal to achieve an Islamic ‘goal’)?
Answer: In the Name of Allah, Most Compassionate, Most Merciful,
It is heartening to know that you wish to pursue a Shari’ah compliant career and thus earn halal income, Al-Hamdulillah. May Allah Most High facilitate this for you in the best of ways, Ameen.
1) As you are aware that all forms of conventional insurance have been deemed unlawful by most contemporary scholars due to them containing elements of interest (riba), gambling and contractual uncertainty (gharar). As such, it is not permitted to work or develop a career in the actuarial industry where one’s job would entail calculating insurance premiums, calculating risks and costs of insurances, providing advice and statistical information on insurances and other similar activities.
Working in Islamic cooperative insurance (takaful) companies is indeed a viable alternative. There are undeniably differences in certain issues relating to Takaful between scholars who are experts in the Islamic finance industry, and not everything advertised as halal is halal. As such, my suggestion would be that you carefully consider the products offered by the financial institution you would like to work for as well as its Shari’ah Board scholars, and if you trust and are content with what the company has to offer, you may work for that company. You do not have to limit yourself to working for Takaful companies that have Hanafi scholars on their Shar’iah Board.
2) It would not be permitted to work for a conventional insurance company even with the intention of working for a Takaful company in the future, since ends do not justify the means, especially when, as you say, there is a risk of not finding work with a Takaful company.
3) Pursuing a career in accountancy is also an option. It is generally permitted to work as an external auditor, since one is not personally involved in interest-based transactions. As for what is preferred, if you can find a job in a Takaful company whose Shari’ah scholars you trust, then it may be better to work in the Takaful industry rather than in accountancy.
4) Like any industry, the Islamic finance industry is not free from flaws. But this does not mean that the various products offered as alternatives to conventional mortgages and insurance are un-Islamic and interest-based schemes in disguise. However, every Islamic financial institution and each Islamic finance product offered has to be studied on its own merit. Not everything declared as halal is halal, and neither is the whole Islamic finance industry haram. As such, when the time comes, carefully select which Takaful company you would like to work for, keeping in mind the credibility, knowledge and righteousness of the scholars who sit on its Shari’ah board.
And Allah knows best
Muhammad ibn Adam al-Kawthari
Darul Iftaa, Leicester, UK