Underwriting is a fundamental aspect of covering risk. It is a process that enables an insurance company or takaful operator to choose whether to cover a specifi c risk or not. Underwriting helps to create a portfolio, the takaful operator generates charges, it
helps in selecting which risk to take on board and it also ensures Shari’ah compliance with regard to the risk taken and also protecting the takaful fund. Takaful underwriting aims to provide equitable and fair risk-sharing schemes amongst participants that are relatively homogenous in nature. For further details see: ISRA, Islamic Financial System; Principles and Operations.
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