Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
121
Acumen: International Journal of Multidisciplinary Research
DEVELOPING THE INSURANCE SYSTEM THROUGH ISLAMIC
FINANCIAL INSTRUMENTS
teacher Sadullaeva Gulnoza Usmanovna
Parpieva Madinabonu Bakhtiyor qizi
Annotation
This article examines the issues of developing the country's insurance system
using Islamic finance instruments. The basic principles of the Takaful insurance
system, its differences and advantages from traditional insurance are analyzed. Also,
based on international experience and statistical data, the legal, economic and social
aspects of introducing Takaful in our country are considered and recommendations for
development are given.
Keywords: Islamic finance, Takaful, insurance system, economic justice, foreign
experience, risk distribution, interest.
The insurance system is an important component of the economy and is of great
importance in ensuring the financial stability of the population. Today, improving the
insurance system and increasing confidence in it among the population is one of the
urgent issues in Uzbekistan. In this regard, the introduction of a takaful insurance
system based on the principles of Islamic finance is of great importance. The takaful
system is recognized as an innovative approach that ensures economic justice,
transparency, and benefit. This article analyzes the possibilities of developing the
insurance system through Islamic finance instruments.
Extensive research has been conducted internationally on Islamic finance and the
takaful insurance system. Ahmad and Rahman (2017) in their study examined in detail
the basic principles of the takaful system, including the principles of mutual assistance
and risk sharing. Al-Suhaimi and Qudsi (2019) also analyzed the main differences of
the takaful system from traditional insurance and showed its social and economic
advantages. Among local studies, the work of Solimov and Karimov (2021) deserves
special attention, who analyzed the specific adaptability of Islamic finance for the
Uzbek economy. However, in-depth research on the development of the takaful
insurance system in our country has not been conducted enough.
The takaful insurance system is an important component of Islamic finance, the
main principles of which are based on mutual assistance, justice and transparency. In
the takaful system, participants pool funds together and use these funds to cover
unexpected financial losses. In this process, elements prohibited in Islam, such as
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
122
Acumen: International Journal of Multidisciplinary Research
interest and gambling, are strictly prohibited. The main differences between takaful
insurance and traditional insurance are as follows:
1. In traditional insurance, the risk is borne by the insurance company, while in
takaful it is distributed among the participants.
2. In the takaful system, all transactions are transparent and fair conditions are
provided for the participants.
3. Takaful is aimed not only at economic profit, but also at providing assistance
to society.
The introduction of the takaful insurance system in the conditions of Uzbekistan
provides the following advantages:
• Increasing confidence in insurance services;
• Support for small and medium-sized businesses;
• Achieving social justice by ensuring the economic stability of the population.
The experience of countries such as Malaysia, the United Arab Emirates and Saudi
Arabia in the field of takaful insurance is noteworthy. In Malaysia, the takaful system
is supported by the state and operates on a legal basis. In this country, takaful
companies actively participate in financing social projects. In Saudi Arabia, takaful
insurance is an important part of the health care system and is intended for the general
public. In the United Arab Emirates, the takaful insurance system is widely used in the
business and private sectors, which is important in ensuring the stability of the country's
economy.
The insurance market in Uzbekistan is still in the development stage, its share in
GDP is 1.2%. The level of use of insurance services is low, and trust in it among the
population is not sufficiently formed. In Malaysia, the insurance market accounts for
4.5% of GDP, which indicates the economic efficiency of the takaful system. The
introduction of takaful insurance in Uzbekistan can expand the insurance market and
increase the financial stability of the population.
In conclusion, it can be said that the possibilities of developing the country's
insurance system through Islamic finance instruments were analyzed. The following
proposals were put forward:
1. Formation of legal frameworks for the development of the takaful insurance
system and provision of state support.
2. Development of a model suitable for the conditions of Uzbekistan, based on the
experience of Malaysia and Saudi Arabia.
3. Introduction of takaful insurance as a means of financial support for small and
medium-sized businesses.
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
123
Acumen: International Journal of Multidisciplinary Research
4. Conducting comprehensive explanatory work on Islamic finance and takaful
insurance among the population.
These proposals will serve to increase the economic efficiency of the insurance
system and ensure the financial well-being of the population.
REFERENCES
1. Ahmed, S. (1989), Islamic Banking and Finance, Journal of Monetary
Economics, Vol 24, pp. 157-167.
2. Blitz, R. and Long, M. (1965), The Economics of Usury Regulation. Journal of
Political Economy, Dec., pp. 608-619.
3. Akhmadjonov, A Abdullayev, A Abdupattayev, M Sultonov. (2021). ISLAMIC
BANKING MANAGEMENT, ASSETS AND LIBILITIES. Scientific progress, 2 (6),
1525-1532.
4. M Mamadjonov, A Abdullayev, I Abdurahmonov, A Mamadaliyev. (2021).
Challenges of management in the digital economy. Scientific progress, 2 (6), 1533-
1537.
5. MMQ Tojiyeva, AAU Abdullayev. (2021). The use of modern technologies in
statistical data collection. Asian Journal of Multidimensional Research 10 (12), 250-
254.
