An Islamic insurance start-up has launched its first offering with a view of expanding its product suite to serve the needs of Muslims in the UK.
Regulated by the Financial Conduct Authority, InsureHalal is leveraging on technology to reach the fragmented retail Muslim market of the UK and Europe. Working on a range of Islamic insurance solutions, the firm has introduced its first product, Halal home insurance.
“A lot of insurance providers out there… will make a loss on some parts of their proposition but then make up that loss by selling you other bits of cover that are essentially a rip-off,” shared Salman Badr Al-Hasan, the chairman of InsureHalal who was previously part of the Islamic finance team at international legal firm, Simmons & Simmons. “That’s essentially what we want to fix with this technology.” The start-up has developed an online platform enabling customers to pay for customized coverage instead of the usual off-the-shelf bundled up schemes.
With a nascent Takaful market, breaking into the space is expectedly challenging.
“It has been hard to persuade insurance companies that this is what they need to do in order to enter this market,” said Salman. “It was several years of discussions before we found a good quality, well-capitalized insurance company… that was willing to participate on these terms.”
However, things are looking up for the young company.
“We have seen a lot of interest from people who want to participate now that they understand the proposition, market size and demand. The retail insurance market is very competitive, and people are scrambling for market share and often making losses on the products they have got. An underserved niche market attracts a lot of interest. What you will see in the next four to five years is a lot of other players entering the market and a lot more products available,” believes Faizal Karbani, CEO of InsureHalal.
One trend that is likely to encourage the growth of Islamic insurers is the rise of ‘managing general agents’ (MGAs) — smaller players who are partnering up with larger companies to take care of the niche markets that the big boys don’t necessarily have the expertise or agility to cover. “That’s played very well into what we are doing,” explained Faizal, who is also the CEO and founder of Simply Ethical Financial Services. “We are essentially an MGA that can set up and use the facilities of bigger players but still serve our niche market.”