A brand new insurance business that is tailored to suit Islamic beliefs has been launches by outsourcing giant Capita, most widely known for managing London’s congestion charge and collecting the BBC television license fee.
Capita works with British Islamic Insurance to produce this initiative in April. The partnership will initially sell car and cheap property insurance followed by investments. Life insurance coverage, savings and ethical finance goods are being added later in 2008.
Capita will run the rear office side from the business, selling policies and processing claims. Within the next 8 years the offer is expected to become worth £87 million to Capita.
Typical UK insurance goods are not consistent with Islamic beliefs as “riba”, or interest, is forbidden within the Koran, although progressive Muslims often view this as extortionate interest. Devout Muslims will also be put off through the elements of gambling and uncertainty insurance products involve when you are betting on whether you believe your property is going to be safe or otherwise.
Chief executive of British Islamic Insurance Holdings, Bradley Brandon-Cross, said: “The Muslim faith states that, due to various product features, conventional UK insurance option is in conflict with Islam which creates a dilemma for British Muslims. We're planning to produce a British insurer that are operating in a way that removes this dilemma and helps to create an exciting new sector within the British insurance market."
This can be a corner from the market previously untargeted by insurers and when Capita seems to get it right it may be very lucrative. Insurance coverage is a practical purchase, made to cover you from theft, accidental damage, loss and often ever disasters and it often pays to possess this cover.
Capita’s new insurance method is going to adhere to ‘Takaful’ principles. It is really an Islamic insurance concept that has been seen in excess of 1400 years being practised in several forms. Its origins come from the Arabic work Kafalah that is loosely translated as guaranteeing one another or a joint guarantee. Takaful is really a form of mutual insurance, depending on responsibility and co-operation. Policyholders co-operate among themselves, each can pay a subscription, meaning any uncertainties are eliminates, losses are divided and also the liability is spread over the community of policyholders.
Capita began trading within the financial markets in 2000, initially offering general insurance after which more so within the life and pensions side from the market. Insurance has provided Capita with a few of its biggest contract wins, for instance in the past year it began a £722 million agreement with Prudential for that administration of 7 million mature life and pensions policies. It's since seen 1,750 Prudential UK staff proceed to Capita and 1,250 Bombay staff also have joined Capita.
The organization has also been appointed to operate the back office in Norwich of Marsh at the begining of 2008, a US based insurance agent, this deal is anticipated to be worth £200 million towards the company over the next decade.
Pre-tax profits have risen for Capita in 2007 by 19% to £238.4 million on turnover up 10% to £2.07 billion. Capita also said hello has excellent visibility on its 2009 and 2010 earnings having already got 2008’s £2.3 billion secured.
Capita’s leader, Paul Pindar believes that any downturn in the economy would be a positive thing for Capita, because others would be seeking to outsource their back office work.
Capita can also be beginning to undertake other companies’ sales and front office operations. It run customer contact centres for DSG, formerly Dixons and eircom, an Irish telecoms operator.
Capita has stated its dividend increases by 33%, this really is in line with a five-year average of 32% increase. The organization has also proposed revisit 25p per share via a different, special dividend.
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