Insuring Muslims

For a long time, many Muslims were critical of western insurances. Some Quran scholars saw them as a game of luck, which is forbidden by Islam's holy scripture. That's because neither the insured nor the insurer know whether an accident will ever happen. Religious experts also compare insurance with interest to the content of a fishing net that has not been lifted out of water -- it could be empty or full.

But banks and insurance companies have not been deterred by this when it comes to making a profit. Orthodox Muslims are a booming market segment, with growth of up to 30 percent expected just this year. Some say that products catering to Muslims will make up 20 percent of the insurance market in 20 years.

Pure insurances

That's why insurers have developed products that are acceptable under Islamic law. Munich-based Facility for Worldwide Unit Insurance (FWU), for example, has discovered the Middle East's market for life insurances.

"When we began in 2000, we saw that the offerings for life insurances in Islamic countries are quite small while the demand is growing," said Manfred Dirrheimer, the founder and head of FWU. "Western products offered there either didn't conform with religious laws or they did conform, but didn't make economic sense. We said that someone, who takes his faith seriously, shouldn't be punished with bad products."

FWU developed so-called takaful, or guarantee policies that conform with the Quran, and has been selling them in the United Arab Emirates and Kuwait. The money of the insured can only be invested in places that have been deemed "pure" according to Islamic law.

"A classic insurance uses death rate statistics," Dirrheimer said. "I look at when someone was born and then I know the probability that he or she will survive the contract. The policy premium is based on probability. And that's a game of luck, according to an Islamic point of view."

No demand in Germany?

Takaful policies on the other hand have people paying money into a fund, which gets invested according to Islamic law. In the case of an accident, the affected receives the money that has been accumulated. The insurer therefore only administers a fund.

As the first western insurer, Germany's Allianz has also begun offering takaful policies in Indonesia last year. Company officials are especially hoping for good business in the country's Aceh province, the first in Indonesia that's introduced Sharia law.

While the market abroad is booming, similar policies are not offered in Germany. While more than two thirds of the country's three million Muslims consider themselves religious according to the Institute of Islamic Banking and Insurance, there's apparently no demand for such insurances.