Development of Islamic finance is accelerating in the UK ahead of the country's exit from the European Union, with plans for Britain to issue a second Islamic bond in 2019.

AIG UK, part of American International Group Inc, said the buyer of the 5 million pounds policy was a Gulf-based financial institution which acquired an industrial property in the North of England. The policy was placed by broker Risk Capital Advisors.

AIG developed the Islamic insurance policy through a partnership with managing general agent Cobalt Underwriting, having closed a similar deal last month for a client based in the Middle East.

Islamic insurance, or takaful, follows religious principles such as bans on gambling and outright speculation, with interest-bearing products deemed off-limits.

There are more than 20 firms in Britain that offer sharia-compliant financial products, the most of any other Western country.

(Reporting by Bernardo Vizcaino; Editing by Jacqueline Wong)