British Islamic Insurance Holdings [BIIH] is awaiting Financial Services Authority approval for its new consumer brand to open for business in April.
Capita will provide outsourced new business processing.
As they stand, traditional British insurance products conflict with Islamic beliefs.
The Koran forbids riba or interest which progressive muslims see as usury or extortion. Devout muslims also view the uncertainty of insurance as a form of gambling - also forbidden.
In a direct historical parallel it was the Gaming Act of 1745 that first reformed insurance policies in Britain giving rise to life assurance as we known it.
BIIH will open its doors to motor and home inurance with investment and life assurance products appearing later this year.
The deal is forecast to be worth £87 million to Capita over 8 years.
BIIH predicts strong UK demand for products complying with takaful - the muslim concept of insurance.
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