AIG UK said on Thursday it had underwritten its first sharia-compliant warranty and indemnity policy out of London’s M&A insurance market, as the city looks to Islamic finance to help bring new business.
Development of Islamic finance is accelerating in the UK ahead of the country’s exit from the European Union, with plans for Britain to issue a second Islamic bond in 2019.
AIG UK, part of American International Group Inc, said the buyer of the 5 million pounds ($6.6 million) policy was a Gulf-based financial institution which acquired an industrial property in the North of England. The policy was placed by broker Risk Capital Advisors.
AIG developed the Islamic insurance policy through a partnership with managing general agent Cobalt Underwriting, having closed a similar deal last month for a client based in the Middle East.
Islamic insurance, or takaful, follows religious principles such as bans on gambling and outright speculation, with interest-bearing products deemed off-limits.
There are more than 20 firms in Britain that offer sharia-compliant financial products, the most of any other Western country. ($1 = 0.7605 pounds) (Reporting by Bernardo Vizcaino; Editing by Jacqueline Wong)