News From : DagangHalal.com (22 Aug 2009)
UK MUSLIMS who own their own businesses will be able to take out business insurance compatible with their faith from next year.
Salaam Halal Insurance, the UK’s first standalone Islamic insurance company plans to launch a range of commercial lines products in the first quarter of 2010.
Bradley Brandon-Cross, CEO of Salaam, told the Sunday Herald: “Islamic finance is relatively new in this country. Form the customers’ point of view they have had very limited choice for a very long time, if not no choice at all in terms of products.”
The decision to launch a range of commercial lines products builds on the strategy the company first tested with its UK motor policy in July 2008. That scheme offered Muslims the chance to take out legally required insurance without compromising their religious beliefs. Shop owners and restaurateurs are also required by law to have public liability insurance and, where relevant, employers’ liability as well. Professionals including solicitors, doctors and financial advisers must have professional indemnity insurance.
Brandon-Cross explained: “You have to bear in mind that, as with Muslims who drive cars, these business owners and professionals have up until this point been insured with other insurance companies. They are very familiar with buying products. What we were able to get across with motor was that this product did everything that your existing product does, but it has one unique benefit, which is it is complementary to that, in that it is absolutely Halal permissable under Koranic law.
Muslims are more likely than any other group of the working population to be self-employed. A report by marketing group Mintel last year concluded that there are 1.3 million Muslims of working age in the UK, and 19% of them are self-employed, compared to just 13% self-employment in the UK population as a whole.
Omar Shaikh, a board member of the Islamic Finance Council UK told the Sunday Herald that there is demand for Islamic finance products among Scotland’s Muslim small business owners. He said that the IFC regularly met with Muslim business owners and had hosted a round table on the subject of Sharia-compliant business finance.
He said: “The demand and desire is there, but, as with retail finance, there is a job to be done educating businesses in order to build familiarity and confidence in these products. Business owners need to be made aware that there is a competitively priced Sharia-compliant alternative.”
His point about the need for awareness and education that an alternative to conventional products exists is confirmed by Ikram Ashraf, who owns and runs Personal Eyes Opticians in Renfrew. Ashraf said: If you can get something that is similar but is Sharia-compliant then that is obviously something that you would look to do.”
Ashraf, currently uses a broker to source his insurance, which includes employers liability as he employs two staff, public liability for those visiting his premises as well as insurance to cover any thefts. However he says he will look into exactly what makes this insurance compatible with his faith.
He continued: “I don’t really have a lot of time because I only started my business three years ago so I get a broker to look at insurance for me. But I would check out the Sharia aspects myself and get the broker to check out the quotes from other companies. So it is something that once it launches in Scotland then I would be willing to look into.”
However, Ashraf is still conscious of price. He said: “I would pay a bit extra for it to be Sharia-compliant product but it has to be within a budget because I am building a business.”
In a separate move, Islamic Bank of Britain, which launched Scotland’s first Islamic mortgage earlier this year is also planning products for this target group. Research among its existing mortgage customer base, a large proportion of whom are professionals, identified clear demand for Islamic pension products. The company now plans to launch a range of pension options in the coming year to meet this untapped demand.
Sultan Choudhury, commercial director at IBB said: “We are maintaining an aggressive stance in terms of product development.”