They say that the sort of transaction of insurance was not known in the period of the Prophet(ﷺ), nor at the time of great scholars who founded the Fiqh.

He said in his Fatwa that the commercial insurance is illegitimate on the basis of Riba, Gambling, ambiguity and Gharar. He says that this insurance is tricky operation to eat up people’s property illegally. One of the accurate statistics conducted by a German expert, according to him, has proven that the proportion that goes back to people in comparison with what they pay does not exceed 2.9%.
However, he gives concession that:

It is well known that in most of non-Islamic countries there are cooperative and mutual insurance companies. There is no harm from the Shariah point of view to participate in these services. But, if a cooperative insurance company is not found, one may enter into a contract with a commercial insurance company only by way of need. It is obligatory for him to be content with the minimum proportion of insurance that covers his need or to the minimum of such transaction he is being enforced to carry out.