With reportedly over 10 Takaful providers in the UK, there has not been a strong adoption of Islamic insurance by the Muslim market as one would expect given the growth of Islamic banking and finance in the country. The lack of standardization in the Takaful market could be a key factor for the slow growth. Global Insurer AIG, which issued the first Shariah compliant warranty and indemnity insurance policy in the London insurance market last year, hosted a panel discussion last month on Shariah compliant insurance or Takaful. Panelists discussed the challenges and opportunities in the UK market as well as policies to improve the standards and uptake of Takaful products in the country.
To address this concern, the Islamic Insurance Association of London (IIAL) is also seeking Shariah scholars’ approval for London’s standards for the transaction of Islamic commercial insurance to be rolled out next year coinciding with the UK’s departure from the EU on the 29th March.
The IIAL which counts Lloyd’s of London as a founding member, is seeking both legal and Shariah advice on the standards framework it has developed with London market associations. Although the standards won’t be enforceable, the IIAL hopes the new standards will become best practice and raise industry standards as fintech start-ups also expect to enter the market and challenge incumbents.
Insure Halal is one of the country’s fintech start-ups which at the beginning of the year launched its Takaful home insurance product for both buildings and content coverage and is expecting to roll out further Takaful products in the near future. In Islamic banking news, to celebrate Ramadan, Al Rayan Bank increased the expected profit rate on its instant access cash ISA savings accounts from 1.22% GPA (gross per annum) to 1.35% GPA. The new rate is available to both new and existing customers.
This article was first published in Islamic Finance news Volume 15 Issue 23 dated the 6th June 2018.