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Working in an actuary firm

Question #: q-19423823
Date Posted: 2007-02-02

QUESTION

Is it permissible for an individual to work in an actuary firm, and, more generally in an

Insurance company? Which area in finance would you recommend a Muslim to work in?

ANSWER

In the name of Allah, Most Compassionate, Most Merciful,

If one's job in an actuary firm entails calculating insurance premiums, calculating risks and
costs of insurances, providing advice and other statistical information on insurances and
basically making the technical calculations required for the pricing of insurance policies,
then it will not be permitted to take up that job.

Sayyiduna Abd Allah ibn Mas'ud (Allah be pleased with him) narrates that the Messenger of
Allah (Allah bless him & give him peace) cursed the one who accepted usury, the one who
paid it, the witness to it, and the one who recorded it. (Sunan Abi Dawud, number 3327)

As explained in many earlier answers, all prevalent forms of commercial insurance are
unlawful, as they involve Riba transactions in one way or another. To be directly involved
with interest-based transactions is not permitted, and as such, advising on insurance policies
will not be permitted.

Then there is also the aspect of the source of one's income that needs to be considered. If the
firm pays one's salary from the profits it makes through the sale of insurance policies, it will
not be Halal for one to take that salary, as the company would have made this profit through
unlawful means.

Therefore, generally employment in an insurance company must be avoided, as explained in

many previous answers.

If one is unemployed and has to support his dependants, then one will be excused until an
adequate alternative job is found. Many scholars have permitted to continue working and
using the income for the needs of oneself and one's family until one finds a suitable job. At
the same time one must seek forgiveness from Allah Most High for one's actions and pray to
Him to extract him from this sin.

Note that if the job in an actuary firm is not connected to insurance policies but rather it
consists of applying financial analysis to a wide range of business problems, then it would
be permitted provided there is no other reason of prohibition.

And Allah knows best

Muhammad ibn Adam
Darul Iftaa
Leicester , UK