Demand and Supply UK Takaful Industry

Takaful Islamic Insurance  Demand and Supply UK Takaful Industry

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The takaful industry has a rapid growth rate worldwide. In July 2006, in the Middle Eastern region, there were 23 functional takaful companies and 18 companies in their formation process. In the Asia Pacific region there were 34 takaful companies; 23 of them in Indonesia alone. In Africa 12 out of 17 takaful companies were located in Sudan (Bhatty, 2007b).

A study by Abdul Rahman (2009) shows that there is a potential demand for and growth of takaful worldwide. She also considers in particular the main factors that affect the future potential growth of the takaful market in the USA. She highlighted that affluent communities, high education, positive population growth rate and social structure all play a role in this potential growth.

Takaful Islamic Insurance

Despite there being many Islamic insurance providers across the world, there are only two takaful insurance providers in the UK; Muslim Insurance Services (MIS, 2010) and Salaam Halal Insurance (SHI, 2010). MIS provides several Islamic insurance products ranging from personal insurance products to commercial insurance products. As personal products they provide home insurance and travel insurance with different options to suit Muslim needs, e.g. single trip insurance, annual multi trip insurance, family travel insurance, pre-existing medical insurance, business travel insurance and Hajj/Umrah travel insurance. In addition, they also provide a package of products for commercial needs, such as business insurance, professional indemnity insurance, landlord insurance, mosque insurance and charity insurance. The last two are very unique which aim to insure and protect the religious and charity buildings in the UK, including asset and liability cover. All of these are Shariah compliant.

Takaful Islamic Insurance

Principle Insurance Holdings Limited (PIH, 2010) was the first independent takaful insurance provider in the UK. They had been providing car insurance trading as “Salaam Halal” since July 2008 aimed at the 1.6 million Muslims living in the UK. However, their business failed to raise capital to continue as they stated on their web site: “We are sorry, Salaam Halal insurance is not accepting any new requests for insurance quotations or issuing new contracts.” (SHI, 2010).

There are several studies, for example, those carried out by Abdul Hamid and Othman (2009) (introduced below) and Dar (2005). Some of these considered questions which are of great interest to the topic of this paper; these are re-examined in Section 4, based on Muslims in the UK.



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To cite this document:
Tahani Coolen-Maturi, (2013) "Islamic insurance (takaful): demand and supply in the UK", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 6 Issue: 2, pp.87-104, doi: 10.1108/17538391311329806.