Risk underwriting is an important aspect in the insurance and takaful scheme. It comprises process of classification, rating, and selection of risks. This selection process consists of evaluating information and resources to determine how an individual or asset will be classified. After this classification procedure is completed, the policy is rated in terms of the contribution that the applicant will be charged. The underwriter’s task is to use all the information gathered from numerous sources to determine whether or not to accept a particular applicant. For instance, the underwriter will look for any factors such as occupation that could make the applicant more likely to die before his or her natural life expectancy or reasons to anticipate that the individual may become ill or involved in an accident that will create high medical expenses (Financial Web, n.d.). In addition, the process of risk underwriting in takaful has a role in identifying the Shariah-compliant risk. Shariah screening methodology in Islamic capital market also has a similar role in identifying Shariah-compliant investments. This article will highlight on the issue of mixed risk in takāful and the role of Shariah screening methodology in the takāful industry.
