QBE capacity allows Cobalt to boost lines
Global insurance group QBE has become the second big re/insurer to provide capacity to the world’s first Shariah-compliant MGA, Cobalt Underwriting.
The agreement will allow Cobalt Underwriting to now offer clients $50 million of casualty capacity and significantly grow the size of its existing product lines.
Cobalt Underwriting, which is based in the Lloyd’s building, already utilises capacity on behalf of XL Group.
The agreement with QBE will see Cobalt’s line size for property risks rise from $300 million to $425 million, construction rise from $100 million to $160 million and $50 million capacity for casualty risks.
“We are delighted to be in a position to announce QBE as our second capacity provider and our agreement delivers larger line sizes to our existing products alongside casualty capability which will allow us to meet the demands of those who require quality capacity which is also in keeping with the tenets of Shariah law,” said Cobalt chief executive officer Richard Bishop.
The potential of the Shariah-compliant market is significant. In 2011 it was estimated that total global Islamic financial assets stood at $1.631 trillion. The global Islamic financial services industry is valued at $1.357 trillion and continues to defy the global economic stagnation. The Sukuk asset class grew by 77 percent to $85 billion in 2011 alone and the growth in the Islamic banking industry was put at 16.4 percent for the year.
Neila Buurman, QBE director of Canada & Middle East, said: “QBE is excited to work in partnership with Cobalt on an agreement that enables us to access globally the fast growing area of Shariah compliant insurance. We believe that this opportunity will complement our existing portfolio of business.”
Bishop added: “We have the backing of two of the world’s major underwriting groups and that support highlights the potential and demand for Shariah-compliant products across the world.
“For Cobalt Underwriting, this agreement delivers line size enhancement and the ability to offer clients a solution to their casualty insurance needs. It has long been our intention to broaden the range of products we offer since our launch last year and we will continue to do so.
“We believe that what we are creating delivers a new dynamic to the provision of insurance and reinsurance particularly for requiring Shariah compliant products.”
Cobalt was assisted by AON Benfield which placed both binders with QBE and XL Insurance.
