Yahsat arranges Sharia-compliant policy for first two satellites
Abu Dhabi-based satellite operator Yahsat has arranged the first fully Sharia-compliant insurance policy for the launch of its first two satellites, Yahsat 1A and 1B.
The takaful insurance was brokered by Willis Inspace and provided by Methaq Takaful…
Abu Dhabi-based satellite operator Yahsat has arranged the first fully Sharia-compliant insurance policy for the launch of its first two satellites, Yahsat 1A and 1B.
The takaful insurance was brokered by Willis Inspace and provided by Methaq Takaful Insurance Company of Abu Dhabi and Dubai’s Elseco.
It is understood that these Islamic insurers make up a relatively small portion of the total insurance policy, the main strand of which has been arranged under conventional commercial terms. The takaful insurance was arranged when Yahsat sought additional coverage.
Yahsat CEO Jassem Mohamed Al Zaabi said: “Insurance protection is an integral part of our satellite program. With firm roots in the region, we are proud to be the first organisation to use a new Sharia-compliant insurance solution for space programs. This augurs well in the development of the Takaful insurance market as well as make available an alternative market for space insurance products. Going forward, we are open to working with insurance providers in developing innovative and customised solutions to serve our needs.”
Takaful is an Arabic term that translates to “guaranteeing each other” or “joint guarantee”.
Insurance of this kind is based around a concept of shared responsibility and acts as a kind of co-operative insurance. Policyholders will agree to assist and indemnify each other, and liabilities are spread out across the pool of the insurance community involved.
Conventional commercial insurance is deemed undesirable under Sharia law because it involves the principles of Riba (Interest), Maisir (Gambling) and Gharar (Uncertainty).
Pierre-Eric Lys, chairman of Elseco, commented: “This sophisticated insurance contract is innovative in many respects. It is the result of a long process involving several companies with very different background and expertise. We have managed to fulfil the requirement of our client. We are convinced that this contract will allow Yahsat to enhance its risk management and finance structure in many ways. Several other satellite operators and manufacturers have already expressed their interest for similar insurance products”.
Yahsat 1A and 1B are being constructed by an EADS Astrium-Thales Alenia Space consortium. Both will be launched in 2011. 1A will be launched by Arianespace and 1B by International Launch Services.
