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Sharia Insurance

Sharia Insurance is an insurance based on sharia principles with regard to mutual assistance (ta’awuni) and mutual protection (takafuli) between the participants through a collection of fund (Dana Tabarru’) managed under sharia principles to deal with certain risks.

Below are some definitions of sharia insurances:

  1. Akad means a written agreement that contains certain arrangements including the parties’ rights and obligations according to sharia principles.
  2. Akad Tabarru’ means an agreement of grant where a Participant provides the fund to Tabarru’ Fund for the purpose of helping each other among the Participants, which is not commercially in nature and purpose.
  3. Akad Wakalah means Akad Tijarah that authorizes the Company as the representative of the Participant to manage Tabarru’ Fund and/or Participant’s Investment Fund in accordance with authorization with compensation in the form of ujrah (fee).
  4. Akad Mudharabah means a contract share profits from the Tabarru’ Fund investment.
  5. 5) Contribution means an amount of fund paid by the Participants to the Company where part of the fund is allocated as Tabarru’ premium and the other part as fee (ujrah) to the Company.
  6. Tabarru’ Fund Premium is part of contribution payable by the Participant to be then included into Tabarru’ Collected Fund and Tabarru’ Ageement.
  7. Tabarru’ Fund means a collection of fund from the Participants’ contribution which mechanism of the use is subject to the Tabarru’ Agreement mutually agreed. Underwriting Surplus/Deficit is a surplus/deficit of Participant’s total contribution to Tabarru’ Fund after dedcuted by benefit/claim payment, reinsurance contribution, technical reserve, in certain period.

The advantage of Sharia Insurance

1. Transparency of Participant’s Fund Management Sharia insurance is based on clear and transparent initial contract in accordance with sharia principles. Tabarru’ fund

will be managed professionally by sharia insurance company through a sharia investment according to sharia principles.

2. Participant’s Fund Management according to Islamic principle by avoiding Riba (interest), Maisir (gambling), and Gharar (Uncertainty).

Sharia Insurance eliminates conventional insurance practices containing Riba (interest), Maisir (gambling), and Gharar (uncertainty). Tabarru’ Fund will be used to encounter and anticipate accident/catastrophe/claim among the insurance participants. Sharia insurance enables the participants to prepare themselves financially subject to the transaction principles according to Islamic law. It is therefore no doubtful to have sharia insurance.

3. Allocation and Distribution of Underwriting Surplus

a. In the event of Underwriting Surplus, participants agree to allocate the Underwriting Surplus as follows:

• 50% for Tabarru’ Collection of Fund;

• 20% for qualified Participant;

• 30% for the Company as operator.

b. Underwriting Surplus will be distributed to participants at the latest 90 calendar days following the completion of the calculation.

c.The proceeds of Underwriting Surplus will be distributed to any participants who meet the following qualifications:

• The participant has never submitted claim in the year where the underwriting surplus (deficit) is calculated.

• The participant is not submitting claim on the date where the underwriting surplus (deficit) is calculated.

d. In the event the Underwriting Surplus to be distributed to the Participant is less than Rp 50,000 the surplus will be included into the Tabarru’ Collection of


Asei Re offers the following several Sharia General Insurances:

1. Sharia Property Insurance

It is an insurance providing indemnity to the Insured against any damage or loss of the insured property due to fire, lightning strike, explosion, hit by airplane crash, and smoke from fire of insured properties. The Property Insurance consists of fire Insurance and its extended guarantee (earthquake, storm, flood, hurricane, and the like) and also guarantee of losses as a result of business interruption caused by fire.

Types of property insurance:

• Indonesian Fire Insurance Standard Policy (PSAKI)

• Indonesian Earthquake Standard Policy (PSGBI)

• Property All Risks (PAR) or Industrial All Risks (IAR)


2. Sharia Engineering Insurance

Engineering Insurance is one of insurance forms providing coverage against risk of loss or damage of the insured objects (usually related to the construction; material; equipment or machineries) during the construction or installation of machinery against any risk of loss or damage which is unpredictable, unexpected and considered as an accident.

Extended coverage may be granted against the risks of loss of and damage to property and physical accident of Third Party with maximum amount previous agreed. Engineering Insurance is divided into two (2) main categories:

Project Engineering Insurance and Non-Project Engineering Insurance.

Types of policy for Engineering Project are:

• Contractor All Risks Insurance/CAR: provides coverage against risk of loss of and/or physical damage to construction process.

• Erection All Risks Insurance/EAR: provides coverage against risk of loss of and/or damage to machineries during the installation or commissioning.

Types of policy for Non-Project Engineering are as follows:

• Electronic Equipment Insurance/EEI

• Machinery Breakdown Insurance/MB

• Contractor’s Plant and Machinery/CPM

3. Sharia Marine Cargo Insurance

This insurance guarantees any damage or loss of cargo transported from one place to another by land transport (truck, train, and trailer), by sea transport (ship), by airtransport (aircraft) against the risks occurred during the transportation of cargoes. Types of risk covered are divided into three (3) categories called Institute Cargo Clauses (ICC) which are (from the most complete): ICC “A”; ICC “B” and ICC “C”.

4. Sharia Marine Hull Insurance

It provides guarantee for any damage or loss of vessel, machineries and equipment from any perils of the sea and navigational perils. The guarantee is both in full terms/full conditions (CI 280) and limited terms/conditions (CI 284 and CI 289)

5. Sharia General Accident/Miscellaneous Insurance Liability Insurance

It provides guarantees of legal liability to third parties in the form of bodily injury and/or property damage related to the work or business activities of the Insured.

Types of Liability Insurance:

• Public Liability Insurance

• Commercial General Liability consisting of Public Liability, Employer’s Liability, Automobile Liability, Workmen’s Compensation.

6. Sharia Money Insurance

It provides guarantee for the loss of money, gold and/or anything considered equal to money (check, bank notes, bill of exchange) of the Insured during they are placed in a safe, cash box, or other cash case during expedition from one place to another; when they are placed in cashier or box office where the transaction performed; and guarantee for loss of the insurred’ money due to fraud of the trusted employee in managing the cash.

Types of Money Insurance:

• Cash in Transit (CIT)

• Cash in Safe (CIS)

• Cash in Cashier Box

• Fidelity Guarantee

7. Sharia Personal Accident Insurance

It provides coverage against the risks of death, permanent disability, cost of medical care and treatment caused by accident.

8. Sharia Burglary Insurance

It covers loss due to a theft where the burglar breaks into a building in which the Insured occupies, by means of force/ breaking off and damaging the Insured’s properties as a result of to such act.

9. Personal Accident Insurance Plus Sharia

It provides protection against risk of death caused by accident and illness and employment termination.

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