QBE Europe to provide capacity to Cobalt
London has the potential to become the heart of the Islamic financial market, according to Richard Bishop, chief executive of Cobalt Underwriting, an insurer specifically formed to provide Shariah-compliant insurance, speaking at the launch in London.
Shariah principles prohibit the use of traditional insurance as it utilises aspects of usury, gambling and uncertainty. As major Islamic institutions, corporations and investors have sought to expand internationally, they have been forced to use traditional insurance products out of necessity, but have been seeking a Shariah-compliant alternative.
Access to the necessary insurance capacity with the required security has been a significant hurdle, however, something Cobalt intends to overcome.
Bishop also said Cobalt is in advanced discussions with two major underwriters to provide capacity alongside current capacity provider XL.
The underwriters will provide capacity for construction, property and casualty products and Bishop said the aim was to expand the range of classes underwritten to include the likes of marine cargo and access Lloyd’s capacity.
Cobalt will underwrite medium to large commercial wholesale risks through brokers and not direct personal or commercial lines business.
He said that since 2007 Islamic scholars had been encouraging efforts to find a solution to the lack of capacity for the provision of Shariah-complaint insurance.
“One of our founding principles, and one of our first major achievements was that Cobalt should be responsible for the creation of new standards for the Shariah-compliant insurance and reinsurance industry by developing a blueprint that could be adopted by the London market,” he said.
Bishop added: “I would like to let you all know that whilst not quite completed for this event, we are shortly, we hope, to secure the capacity of another major global insurer. We are currently in advanced discussions with QBE Europe to provide us with additional capacity for both our property and construction propositions, currently provided only by XL Insurance, as well as in addition, uniquely offering us support for a new casualty facility. Naturally we will let everyone know when our discussions are complete.
“This new capacity will bring our property facility to stand at $425 million and our Construction facility to $160 million. Whilst of course these are headline figures, these represent a significant needle mover for the Islamic insurance sector.”
He added: “I can also state that within the next few weeks we should be able to announce the support of a third market to our panel. Whilst I cannot name names, this market will not only significantly increase our existing facilities, but will also add marine cargo and onshore and offshore energy capacity to the mix.”
