Salaam Halal, the Islamic insurance company launched last July, has informed suppliers and partners it is now in “solvent run-off”. It is no longer accepting new requests for insurance quotations.
With 10,000 policyholders, Salaam Halal are now looking for investment and would honour all existing policies until they expire.
Chief executive of Salaam Halal, Bradley Brandon-Cross said the company had originally hoped to raise £80m, meaning it was left with a shortfall.
The insurer failed in raising more money as they had been hit by the global economic downturn.
Mr Brandon-Cross told the insurance trade magazine Post: “Regretfully, a recent rights issue did not produce sufficient funds to support the company’s continuation beyond the life of current customer policies.
“We had planned to raise some more, but unfortunately the Gulf states have been as badly impacted by the credit crunch as anywhere else. People there have invested on the New York and London stock markets, and property too. Since we stopped taking on new business we have had a number of enquiries from potential investors interested in continuing the firm, but these negotiations are at a very early stage.”
Salaam Halal sold “takaful” products, which are compliant with the Koran. This forbids the practice of interest, risk and speculative behaviour.
Instead, customers invest into a pool that pays out whenever a claim is made. Operating companies run the pools and invest their funds according to Islamic law.
