Business insurance specialist, QBE announced from London that it has “become the second major 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,” QBE added.
Cobalt Underwriting is based in the Lloyd’s building. It is already using capacity on behalf of XL Group.
CEO Richard Bishop welcomed the successful conclusion of its negotiations with QBE; stating: “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.”
The bulletin pointed out that the “potential 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.
“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.
Commenting on Cobalt’s growth potential, Neila Buurman, QBE Director of Canada & Middle East, said the pact would enable “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.”
QBE noted that “Cobalt was assisted by Aon Benfield who placed both binders with QBE and XL Insurance.