118
undertakes to indemnify the first party upon the occurrence of a certain specified event. Such
specified event must be adverse to the interest of the policyholder. Furthermore, in Hall D'Ath v
British Provident Association [1932] 48 TLR 240, the court held that the profit motive is a
cardinal element in an insurance contract. These general principles established can be
transposed to a Takaful contract since all elements of a typical Islamic contract can be identified
therein.
The Takaful sector in the UK has continued to suffer the same fate as the Takaful sectors in other
major financial hubs across the world. Takaful has not picked up enough pace like other sectors
of the Islamic financial services industry, such as the banking and Sukuk sectors (D’Alvia, 2017).
Despite its premier position as the leading global financial centre, the UK’s experiment of Takaful
has been a mixed bag of successful and failed initiatives. For instance, in July 2008, there was an
initiative to introduce the first Shari'ah-compliant insurance company in the UK. It was offered
by the British Insurance Company, which was known with the trade name: Salaam Takaful or
Salaam Halal Insurance. After a year in business, Salaam Takaful had to be closed as a result of
non-patronage and low business turnover.
Unlike the Salaam Takaful experience, a unique model of Shari'ah-compliant insurance was
introduced in the London market in 2012 (D’Alvia, 2017). The new model was introduced by
Cobalt Underwriting Services, whose uniqueness is seen in its business model. Through common
management, the Cobalt platform allowed some insurance firms to offer Shari'ah-compliant
products through Takaful windows. The Cobalt platform, trading as Cobalt Underwriting, relies
on several insurers and reinsurers across different jurisdiction. 17 Its market focus is the
commercial business in the global market with significant success over the years. Its products
include marine and trade credit, financial and professional risks (including financial
institutions), property, construction, and casualty. The Cobalt Underwriting is considered as the
world’s first underwriting agency which provides Shari'ah-compliant insurance and
reinsurance covers to clients across the globe.
The success recorded by Cobalt Underwriting, the continuous product development initiatives
by key players in the UK market and the significant paradigm shift towards FinTech inspired a
home Takaful model introduced in 2017. The FinTech-driven model is called InsureHalal which
looks very enterprising considering the technology it adopted in implementing its model.
However, the Takaful policies of the participants are underwritten by LAMP Insurance
Company, which unfortunately went into liquidation recently. 18 As of 31 May 2019, LAMP
Insurance Company has entered into liquidation. It again smacks of reputation risk for TOs in
the UK.
17 Cobalt Underwriting (n.d.). Retrieved from: accessed on: 29/08/2019
18 Insure Halal (n.d.). Retrieved from: , accessed on: 29/08/2019