What is the difference between traditional insurance and Takaful system in Islamic Finance when it comes to: 1. Risk 2. Contributors' Funds 3. Profits / Surplus distribution 4. Insurance company fees?

1- In traditional insurance, risk is absorbed by insurer and reinsurance companies, while in takaful insurance, risk is distributed among insureds. 

2- In traditional insurance, the premium is meant to make profits for insurer after paying covered losses, in takaful, the premiums is low to insure the maximum amount of insureds. 

3- Profits or surplus is distributed among shareholders (stockholders),  in takaful insurance it is distributed among insureds (policy holders) 

4- insurance fees in traditional insurance is part of operating fees and profits, in takaful insurance it is meant to cover investment management fees.

the main different in Takaful and traditional insurance, is Takaful policy holders are the owners of the insurance company, while in traditional insurance companies, the main purpose is to make profits. 

Agreed with the explanation given by Mr. Abdul Rehman

Br Abdur Rahmaan correctly put as........."the main different in Takaful and traditional insurance, is Takaful policy holders are the owners of the insurance company, while in traditional insurance companies, the main purpose is to make profits." 

thanks to invite; I agree  with the explanation given by Mr. Abdul Rehman

thanks for invite agree with all answers

I agree with the Answer added by: عبدالرحمن zughaibi  Risk Management (Seeking) 1 month ago