Britain’s first Islamic Insurance Company receives FSA Authorisation
Britain’s first independent Islamic insurance company has received authorisation by the Financial Services Authority (FSA).
Principle Insurance, which was previously called British Islamic Insurance Holdings (BIIH), will provide unique, Shariah-compliant motor and home insurance to British residents from later this year. It will be the first independent Takaful provider in Britain and will meet the needs of the country’s estimated two million Muslims.
Principle Chairman, Mr Abdulaziz Hamad Aljomaih comments: “I believe Principle will go some way in altering the perception of Islamic Finance in the UK, by showing that progressive, sensible and profitable businesses can be established in accordance with Islamic law. Achieving FSA authorisation is a clear vindication of my belief that Shariah-compliant financial products are not only equitable and profitable but also conform to the modern day principles of international finance, especially from a regulatory standpoint”
Principle Chief Executive, Bradley Brandon Cross, comments: “Some elements of conventional UK insurance, such as the earning of interest, the investment of policyholders’ funds and uncertainty mean that it is not in accordance with Muslim beliefs. We are going to be offering unique insurance products that meet a genuine need and are also competitively priced.”
Policyholders will contribute money to a common pool (the Takaful fund), which is then used to pay claims. Any surplus in the Takaful fund is returned to policyholders, while any deficit is protected by the company’s shareholders. The insurance company is usually remunerated in one of two ways – either by an agreed management fee (Wakala) or a share of the surplus (Mudharaba). Principle Insurance has adopted the Wakala model, as it provides greater transparency. All the activities of the Takaful Fund are supervised and agreed with a board of Shariah scholars.
Principle’s Halal motor insurance will be available from the end of Q2 2008 and will be available on-line or over the telephone.
Mr Brandon-Cross explains: “We estimate that in excess of 500,000 British Muslims are car owners and, with motor insurance being a legal requirement, these consumers currently have to buy motor insurance that compromises their beliefs. Principle will offer the UK’s first Shariah-compliant motor insurance, thereby removing this dilemma.”
All of Principle Insurance’s products and services will be approved by the company’s Shariah Supervisory Committee. This comprises three eminent Muslim scholars from across the world: Shaikh Nizam Yaquby of Bahrain; Dr Mohammad Elgari of Saudi Arabia; and Mufti Abdul Kader Barkatulla, who is based in Britain.
Growth of Islamic finance in the UK
Islamic financial products first appeared on the UK market in the early 1990s when the first Islamic mortgages were launched and recent years have seen significant development as more providers have entered the market.
The UK government also has a strong aspiration to make London the global gateway for Islamic finance. A level playing field is being encouraged by legislative changes made to accommodate the specific needs of Islamic financial products. These measures are increasingly giving UK Muslims an equal opportunity to access finance in compliance with their faith.
Principle’s development of Islamic insurance products is another major step towards providing UK consumers with a better choice of Islamic and ethical financial products.
Principle Insurance background and biographies
Principle Insurance was previously known as British Islamic Insurance Holdings (BIIH). It was formed in 2006 and at the time of launch will have capital in excess of £60 million from Gulf and Asia-based institutional and private investors, with almost half (45.7%) of the funds originating in the Kingdom of Saudi Arabia. Throughout the launch period, the company has worked intensively with a range of advisers to finalise its business plan, submit its regulatory application and gain permission from the FSA to provide insurance compliant with the Muslim faith in the United Kingdom.
The long-term vision of the company is to become the Islamic insurance partner of choice and a provider of an ethical insurance alternative on a selective basis. It aims to focus first on the UK and, in due course, look at entering Europe and high-growth potential GCC countries (e.g. Saudi Arabia, UAE, Qatar).
Mr Abdulaziz Hamad Aljomaih, Chairman
Mr. Aljomaih represents the interests of Aljomaih Group, a major business enterprise in Saudi Arabia. The Group represents General Motors, Yokohama, Pepsi-Cola, Shell, MAN and Fiat-Allis, among others in Saudi Arabia. An engineer by qualification, Mr. Jomaih earned his post graduate degree from USC, in California, before joining the family business. Mr. Aljomaih is founding shareholder and Vice Chairman of Arcapita, a premier Islamic investment bank based in Bahrain. He is also a founder shareholder and board member of Etihad Etisalat (2nd largest GSM operator in Saudi Arabia – market capitalization of circa $7.7 billion) and Dana Gas, UAE (the largest non-state owned oil and gas company in the Middle East – market capitalization of circa $3.5 billion). He serves on the boards of numerous other regional and international companies including Bank Al Bilad, Saudi Arabia (market capitalization of over $3 billion), Karachi Electric Supply Corporation (largest electric utility company in Pakistan) and Uniroll (Steel Rolling and Casting Plant). The Aljomaih Group has interests across the globe in financial services, automobiles, oil and gas, telecommunications, power, steel, beverages, and real estate.
Mr. Bradley Brandon-Cross, Chief Executive Officer
Mr. Brandon-Cross has had a successful career in the insurance industry both in the UK and internationally for more than 22 years. During that time, he has either led or been significantly involved in some 15 completed acquisitions in the insurance sector and successfully grown small or start-up businesses in the UK, the United States, Japan and elsewhere. In 2001 Mr. Brandon-Cross co-founded the Rubicon Corporation, an insurance outsourcing venture. Rubicon quickly grew through a mixture of acquisitions and organic growth, generating revenues of more than £25 million with around 600 staff working for many of the UK’s leading insurance providers. Prior to founding Rubicon, Mr. Brandon-Cross spent 6 years at GE Capital, managing its primary insurance business in Europe and the Far East, first as Managing Director of the non-UK insurance business, operating in 15 countries across the Continent of Europe and Asia Pacific, including France, Germany, Spain, Italy, Japan and Australia. Following this, Mr. Brandon-Cross was Managing Director of the UK insurance business; at the time the UK’s ninth largest insurer and a market leader in specialist property and casualty insurance. Earlier in his career, Mr. Brandon-Cross was one of the principals and head of the Continental European business of Consolidated Insurance Group. Between 1988 and 1992, he was President of Consolidated’s North American business based in Wilmington, Delaware, and before that was Head of Business Development in Consolidated’s UK operations in London and was part of the team that acquired the business from the Beneficial Corporation in 1988. GE Capital acquired Consolidated in 1994.
Mr. Michael David Ross, CBE, FFA, CCMI, Non-Executive Director
Mr. Ross was formerly Chief Executive of Scottish Widows from 1991 to 2003 and a Deputy Group Chief Executive of Lloyds TSB from 2000 to 2003. He is currently Deputy Chair of the Customer Impact Panel of the Association of British Insurers (ABI), and a member of the Finance and Investment Committees of the National Trust for Scotland. He also holds non-executive appointments in the Pearl Group and mform Ltd.
Mr. Dennis Holt, Non-Executive Director
Mr. Holt recently retired as Group Chief Executive of AXA UK where he led the business interests in the UK and Ireland. He has held a range of roles in Lloyds TSB over a period of 31 years, latterly as the Main Board Executive Director responsible for the UK Retail Bank, and was a Vice Chairman of the Association of British Insurers, chairing its General Insurance Council. He currently holds a number of Board appointments in the financial services sector, including as Chairman of Liverpool Victoria and a non-executive director of Bank of Ireland and AA Insurance Services.
Mr Syed Mohammed Nadeem Mujtaba, Non-Executive Director
Mr Syed Mohammed Nadeem Mujtaba is Managing Director of Gulf Ventures Group Corporation, a BVI registered venture development firm operating from Bahrain. He has over 20 years of experience in banking, venture development, consulting and financial advisory services in the Middle East and Europe. He has previously served in senior management positions with Gulf Investment Corporation (GIC) in Kuwait and Gulf International Bank (GIB) in Bahrain. Before coming to the Gulf region, Mr Mujtaba worked with Strategic Planning Associates (now Oliver Wyman Management Consultants) in London. Mr Mujtaba is a Certified Public Accountant from the USA and has an MBA from IMD in Switzerland.
Mr Imran Siddiqui, Non-Executive Director
Mr. Imran Siddiqui is an investment professional also representing the interests of the Aljomaih Group in Riyadh, Saudi Arabia. He has over 13 years’ experience in investment banking, venture capital and private equity investment management in Europe, Asia and the Middle East. Prior to moving to the Middle East in 2003, he worked for institutions such as Merrill Lynch, Nomura Securities and JPMorgan Chase in London and Hong Kong. Mr. Siddiqui currently serves on the boards of several companies operating in financial services, power and energy, investment advisory and technology.
Mr. John Willmott, Chief Operating Officer
Mr. Willmott, Chief Operating Officer, has over 20 years business experience which spans insurance, financial services and the oil and chemical industries. He has held several operational director roles within the insurer Aviva, in both the UK and Poland, and prior to that spent four years as a director of GE Capital in the UK and Belgium. Mr Willmott has held several roles in product management, sales, sourcing and quality and worked for over 13 years worked for Shell and ICI/Zeneca in Ireland, Belgium and the UK. He has both academic and business qualifications from Oxford University.
Mrs. Sue Bradbury, Chief Financial Officer
Mrs. Bradbury has been involved in the insurance sector since 1994, initially as FD of Privilege Insurance and then in various FD roles within RBS Insurance ending as FD of UK Insurance in 2004.For the last three years, she has been CFO at Primary Group involved in retail broking, underwriting agency and insurance company activities.
Mr. Lloyd East, Marketing Director
Mr. East has held senior sales and marketing positions for over 15 years for a number of blue chip financial services brands including Bank of Scotland, MBNA, Royal Bank of Scotland and most recently the Automobile Association. At the AA he led the marketing function for the financial services division covering motor insurance, home insurance, loans and credit cards between 2002-2004. Between 2004 and 2007, he was Managing Director of AA Personal Finance, the AA’s joint venture with HBoS that promotes loans, cards and savings under the AA brand.
Mr Trevor Webb, Claims Director
Mr Trevor Webb has more than 20 years’ experience of General Insurance claims, then of which have been spent in senior industry positions. Most recently, Trevor held the role of Claims director for Link and Zenith, part of the Guardian Holdings (Europe) group of companies. Prior to that, he was Technical Claims Manager for Liverpool Victoria.
Mr Andy Haynes, Underwriting Director
Mr Andy Haynes was formerly Chief Executive of the Link and the Zenith Insurance Companies, and has held senior roles in underwriting at Equity Red Star, both Service and Shead Motor Policies at Lloyds and Pearl Group.