SYRIA INSURANCE AND CONVENTIONAL INSURANCE

Abstract

Abstract: Sharia and conventional insurance are two financial protection systems that have fundamental differences in principles, operations, and objectives. Sharia insurance is based on the principle of mutual assistance (ta'awun) and risk-sharing in accordance with Islamic law, avoiding elements of riba (interest), gharar (uncertainty), and maysir (speculation). This model uses the tabarru' contract where participant funds are managed collectively to help fellow participants who experience disasters. Meanwhile, conventional insurance is based on a risk-transfer system, where participant risks are transferred entirely to the insurance company, which aims to seek profit. The main advantage of sharia insurance is the supervision of the Sharia Supervisory Board (DPS) and the principle of sharing underwriting surplus, while conventional insurance offers flexibility and broader coverage without the limitations of sharia principles. Although both have their own advantages and challenges, the selection of the type of insurance must be adjusted to the needs and values adopted by the individual or institution.