The car insurance needs of Britain's two million Muslims can now be met following the launch of Salaam Halal Insurance.
The UK's first insurance provider dedicated to "providing insurance tailored to meet the needs and beliefs of the British Muslim community", Salaam Insurance's products have been designed to comply with Shariah law.
Shariah law, which is the term used to describe the rules that govern the Muslim way of life, prohibits receiving or paying interest, gambling and speculation, uncertainty, exploitation, unfairness and any connection to Haram activities or products (the consumption of alcohol or pork) while requiring risk and reward sharing, fairness and transparency and sanctity of contracts.
Due to the fact that car insurance
is a legal requirement in the UK and insurance companies take on all of the risk for all of the reward, Muslims have been forced to compromise their beliefs in order to company with UK law.
But now, thanks to the launch of Salaam Halal Insurance
, that is no longer the case because Salaam Halal offers insurance protection by using the Islamic principle of Takaful. Takaful literally means ‘guaranteeing each other’ so, instead of paying premiums, policyholders of car insurance provided by Salaam Halal agree to 'guarantee each other' and make contributions (Tabaru’a) to a Takaful Fund.
The pooled contributions are invested in Shariah-compliant investments 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.
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.
"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."
Islamic mortgages and loans are already available in the UK, and although Salaam Insurance is only offering car insurance to begin with, it plans to offer a home insurance policy soon.
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."