Muslims are benefitting from protection products that do not contradict their religious faith, it has been suggested.
Islamic insurance is set to gain market share due to uptake from Muslims, specialist firm Salaam Halal suggested today.
According to the insurance provider, many Muslims in the UK have previously felt that there was "no choice" for them, prior to the introduction of the products on to the UK market.
The insurance works through the system of Islamic finance, which was developed by Muslims in the early 20th century due to their concerns over conducting transactions and sticking to the tenets of their faith. This is because, under Shariah law, taking interest, gambling and "unfairness" is all classified as "haram" - which therefore makes borrowing and investing with conventional financial products problematic for some.
To get around this, Islamic insurance firms operate in a different way to mainstream providers. Rather than the insurance company taking on all of the risk for all the reward, as is usual, customers of Islamic providers sign agreements to guarantee each other in the event of claims. Therefore, they make contributions to a central claims pool which is paid out to customers, rather than pay premiums for their own cover.
Bradley Brandon-Cross, chief executive of Salaam Halal insurance, said: "The UK insurance market has more than 140 insurance companies which are actively writing motor and property insurance but there has never been a real choice for Muslims who want the option of buying an insurance product that is aligned to their faith."
There are currently around 140 providers of home insurance and car insurance in the UK.
