New insurance company, Salaam Halal Insurance, is the first to be compliant with Islamic Law as well as provide the usual services that the many conventional insurance companies do today. To be Islamic compliant means that they must not use the revenue to speculate or take any financial gambles with it. It also means that they are restricted as to where they can invest, for example, not with any company with any association with pork, alcohol or gambling.
Known as 'Takaful', Halal insurance is different from standard British insurance products as the risk is spread over all the policyholders. All the drivers pay into a fund, this is invested in 'Shariah compliant' investments and any profits that are made paid back into the fund. All claims are paid out from this fund and any superfluous cash is divided up among the policyholders as a discount against their next year's premium – as well as any no-claims bonus that they might be due.
Three independent Muslim scholars monitor the activities of the company and they say that they have a great deal of confidence and can offer premiums that compete well with the bigger rivals in the industry. They are also convinced that they will get repeat business from the 600,000 Muslim car owners in the UK.
Abdul Khalisadar, father-of-two from Leyton, East London, was one of their first customers. He drives a BMW, and is a 35 year old Pharmacist. He says that his conscience swayed him towards Salaam Halal but he acknowledged that they were also competitive which helped him to decide that they would be the right choice for him.
'It's exciting to see a completely new product on the market, and I think there will be many people – Muslim and non-Muslim – who will want to switch to a company that does not invest in weapons, alcohol or gambling,' says Peter Staddon from the British Insurance Brokers' Association. His opinion is that the general reaction to the company is extremely positive.
This company, Salaam Halal Insurance, is the latest in the UK to develop a 'Muslim friendly' service – there have been others already, notably some larger Tesco branches have a range of Halal foods, and McDonald's are serving Halal chicken.
So far, the company has only targeted the Muslim community with low-key advertising in Islamic publications and on billboards but they are very hopeful that they will be able to attract many more clients from all the different religious followings.
Salaam Halal Insurance are operating a call center out of Greater Manchester where potential clients can talk to operators in at least 5 different languages - Arabic, Bengali, Gujarati, Urdu or English.
'The face of Britain is changing and it is the responsibility of British institutions to cater for such changes and welcome diversity,' says Bradley Brandon-Cross, Chief Executive of the shareholder-owned parent company of Salaam Halal Insurance.
Over two million Muslims live in the United Kingdom and many of them may be unsure about the principles of Takaful (which means "guarantee each other"). Now with Salaam Halal insurance the UK's Muslim population has the option to buy insurance that is Halal.
Insurance policies are specifically designed by insurance experts under the guidance of a Shariah Supervisory Committee. This ensures that Muslims can have all their insurance coverage in accordance with the Muslim faith.
With conventional insurance an insurance company takes on all of the risk but for Halal insurance, all of the Participants (the policyholders) agree to guarantee each other and, instead of paying premiums, Participants make contributions (called Tabaru'a). The pool of contributions then creates the Takaful Fund.