First Shariah-compliant insurance company launches in the UK

28 July 2008: London, UK : Britain’s two million Muslims will now be able to take out motor insurance that complies with their faith, with the launch of Salaam Halal insurance, the UK’s first independent Islamic insurance operator in the UK.

Despite the UK insurance market being flooded with more than 140 insurance companies actively writing motor and property insurance*, there has never been a real choice for Muslims who want the option of buying a product that is aligned with their faith.

At a stroke, Salaam Halal insurance will change the competitive landscape of the UK insurance market. From today, the company will offer Shariah-compliant motor insurance which is available by telephone or online (0800 980 2454/ www.salaaminsurance.com). Salaam insurance plans to launch a home insurance product before the end of the year.

In addition to offering a genuine choice to British Muslims, the products are also designed to appeal to the non-Muslim community who are interested in products of an ethical or co-operative nature, because of the nature of Halal insurance - known as Takaful.

About Takaful - how does it work?

Takaful is a new concept in the UK because, unlike conventional insurance where the risk is shifted from the policyholder to the insurance company, Takaful is a structure in which risk is shared between all policyholders (**please see notes to editors for key differences between Takaful and conventional insurance).

Takaful insurance allows participants to pay their contribution into a pool (Takaful Fund). The pooled contributions are invested strictly in Shariah-compliant investments (i.e. not in interest bearing investments or investments linked to prohibited goods and activities such as alcohol or pork) and any investment profits are distributed back to the Takaful Fund.

The fund is used to pay claims, and at the end of the year, if the Takaful Fund is over-funded it is then distributed back to Policyholders as a Participation Discount on their next year’s premium. This will be in addition to any conventional No Claim Bonus.

Shariah-compliance

In order to ensure that the insurance is fully compliant with Islamic law, all the activities and products of Salaam insurance are overseen by its Shariah Supervisory Committee - a group of internationally noted Shariah scholars who monitor and guide the activities of Salaam insurance to ensure that all investments, operational and administration activities are consistent with Shariah principles***.

Mr. Abdulaziz Hamad Aljomaih, Chairman of Salaam insurance commented: “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.” Bradley Brandon Cross, Chief Executive of Salaam insurance, added: “It is a disgrace that the financial services industry is lagging behind when it comes to recognising the different needs of the different cultures living in modern Britain today.

Conventional UK insurance options are in conflict with the core beliefs of the Muslim faith and, as a result, give Muslims living in the UK no choice but to compromise their beliefs in order to follow the law of the land. The face of Britain is changing and it is the responsibility of British institutions to cater for such changes and welcome diversity. Salaam insurance is the first insurance provider to offer Muslims living in the UK a choice which gives Muslims the best of both worlds - a good deal on their insurance which is in harmony with their faith.”

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