Islamic insurers work to build Saudi business

Islamic scholars in Saudi Arabia have long looked askance at the insurance industry. They fear it combines riba, or the collection of interest payments, with gharar, or gambling – both forbidden to the pious.

Saudi talk shows and websites abound with questions about insurance, particularly life assurance, which is still viewed with suspicion. But two recent changes have opened new possibilities in this conservative kingdom.

First, newly launched Islamic insurance products are beginning to catch on. Second, since joining the World Trade Organisation in 2006, Saudi Arabia has opened the industry to foreign investment in takaful, sharia-compliant co-operative insurance.