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UK Islamic insurance market expected to expand
28 January 2008 12:00
Provision of cover suitable to Muslim requirements is difficult and remains limited in the UK, according to one insurer, but the sector can be expected to grow in the near future.
Despite Sharia Islamic law forbidding the charging of interest, the Financial Services' Authority recently revealed that the value of finance conforming to its principles has reached £250 billion worldwide, with annual growth of between ten and 15 per cent.
Yet a spokesperson for HSBC noted that Britain's Sharia insurance sector remains in a state of infancy, with health and life insurers so far unable to prevent their parent firms from investing funds in industries like armaments, which is forbidden under Muslim law.
He said that the need for these products to be reviewed by independent Sharia scholars can also be time-consuming, but predicted that compliant insurance provision will grow in line with rising demand, encouraged by the success of Islamic banking and investment.
The spokesperson added that insurance providers are now working to develop suitable life and health products, while HSBC has already launched a Sharia home cover policy, under which participants' contributions pay directly for the losses suffered by claimants.
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