Shariah-compliant insurer launched
Updated on 28 July 2008
The UK's first insurance company which complies with the principles of the Muslim faith has been launched.
Salaam Halal insurance is offering motor insurance policies that are in line with Islam's Shariah law.
Unlike conventional insurance policies, where the risk is shifted from the policyholder to the insurance company, Salaam Halal will use a structure known as Takaful which spreads the risk between all policyholders.
People taking out one of the policies will pay contributions into a pool, with the money then put into Shariah-complaint investments, avoiding products that pay interest and companies that are involved in alcohol.
The pool of funds is used to pay any claims that arise, and at the end of the year if the central pool is over funded, the excess will be distributed back to policyholders through a participation discount on their next premium.
People will also be able to earn conventional no claims bonuses on their policies.
Although the concept is aimed at Muslims, the policies are also designed to appeal to other consumers who are interested in products of an ethical or co-operative nature.
Abdulaziz Hamad Aljomaih, chairman of Salaam insurance, said: "The launch of Salaam insurance - the first independent, fully Shariah-compliant Takaful operator available in this country - is a significant step for the growth of Islamic finance in the UK."
The group also plans to launch a home insurance product by the end of the year.
Policies with the group can be taken out online at www.salaaminsurance.com or by calling 0800 980 2454.
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