Daily Insurance Industry News
 
 
Daily Insurance Industry News
Tuesday 11th of December 2018
March 3, 2008

Launch of Islamic insurance business

by Gill Montia

Story link: Launch of Islamic insurance business

A new insurance business set up to comply with Islamic beliefs has appointed Capita, the outsourcing company best known for operating London’s congestion charge, to provide backoffice functions.

From April, Capita will sell car and home insurance products for British Islamic Insurance Holdings.

The initial launch will be followed by life insurance, investment, savings and ethical financial products later in the year.

Both policy sales and claims administration will be undertaken by Capita under an agreement that should be worth £87 million over eight years.

Bradley Brandon-Cross, chief executive of British Islamic Insurance Holdings, said: “The Muslim faith states that, because of various product features, conventional UK insurance options are in conflict with Islam and this creates a dilemma for British Muslims. We are planning to create a British insurer that operates in a way that removes this dilemma and creates an exciting new sector in the British insurance market.”

The conflicts referred to by Mr Brandon-Cross arise because the Koran prohibits “riba”. This can be translated as “interest” but many Muslims believe it to mean usury or extortionate interest.

The insurance products will also comply with “Takaful” principles, meaning they will take the form of mutual insurance policies, based on co-operation and responsibility.

 

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