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Britain’s First Islamic Motor Insurance

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Points of Essence:

  • Newest player Salam Halaal is a pioneer Islamic motor insurance company in Britain.  Riding on the takaful concept, the customers may now enjoy protection to their vehicles and at the same time discounts on their next premium payments. All devoid of unethical elements as under the conventional insurance. Islamonlinenet has the report.

CAIRO – A London-based Islamic insurance firm has hit UK roads with a Shari’ah-compliant car insurance product that immediately attracted Muslim and non-Muslims for its ethical nature.

“There has been a lot of interest,” Kaye Pimblett, motor insurance manager at the price-comparison site, told The Independent on Sunday, February 15.

“During its first seven days on, Salaam Halal returned more than 37,000 quotes,” she added.

“And when they returned a quote, they appeared in the top three positions on over a third of occasions.”

"It's a transparent process and the opportunity to get something back is attractive to customers, both Muslims and non-Muslims alike," notes Brandon-Cross said.

Salaam Halal Insurance has launched the new motor policies through and its own website.

The new product is based on the Takaful principle, which requires all participants to share risk equally and addresses key features associated with conventional insurance that is incompatible with Shari’ah.

Instead of premiums, people taking out a policy with Salaam Halal pay contributions into a pool and that money is then put into Shari’ah-compliant investments.

The central pool of funds is used to pay any claims that arise, and at the end of the year, if the pool is over-funded, the surplus will be redistributed to policyholders through a discount on their next premium.

But if claims outweigh contributions, shareholders pay excess claims and they recover their money in times of profit.

Islam forbids Muslims from usury, receiving or paying interest on loans.

Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.


The new product has been a great welcome to British Muslims, who were longing for insurance product that complies with their faith.

“Salaam Halal car insurance appealed to me as it is competitively priced, but most importantly, it’s compliant with the Muslim faith, something a have never had before,” said Hassan Ahmed, a Muslim client.

Britain is home to a sizable Muslim minority of nearly two millions.

Salaam Halal Insurance, Britain’s first Shari’ah-compliant insurer, was launched last July to offer policies in line with the Muslim faith.

The nascent firm also plans to launch home insurance policies shortly.

The ethical nature of the Salaam Halal product has proved appealing to non-Muslims as well.

“What is unique is the ethical nature of what we do,” Bradley Brandon-Cross, the chief executive of Salaam Halal Insurance, told The Independent.

“It’s a transparent process and the opportunity to get something back is attractive to customers, both Muslims and non-Muslims alike.”

Emile Abu-Shakra, a spokesman for Lloyds Banking, said the new product attraction is part of the popularity of Islamic finance services.

“Although as a market UK Islamic finance is in its infancy, it’s still set to become big business,” notes Abu-Shakra, whose bank has pioneered Islamic finance in the UK.

“We offer Islamic current and business accounts, mortgages and investment funds,” she added.

“We piloted these in just five branches in 2005 but that quickly expanded to all 2,000 the following year.”

In recent years, London has established itself as a hub of Islamic finance.

There are four licensed wholesale Islamic banks – the only ones in the European Union – in Britain.

There are also 21 conventional banks offering Islamic banking products, the newest of which is Gatehouse, which has received its license in April.


Written by Suapi Shaffaii

February 16, 2009 at 10:43 am

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