Lloyd’s insurer Creechurch Underwriting Limited announced the formation of the first Lloyd’s Syndicate to be managed in accordance with Islamic Shari’ah principles.
“Stephen Gargrave will be the Active Underwriter of Takaful Syndicate 3786, which will commence trading from January 1, 2006, with an initial underwriting capacity of £41 million ($72 million),” said the bulletin.
It described the new initiative as “the culmination of extensive research by Creechurch into the new opportunities being created in the emerging markets in the Middle East, Africa and Asia. Low insurance penetration, changing attitudes to risk, the dramatic growth of Islamic Finance and the introduction of Islamic compliant insurance products such as Takaful in these regions are all factors which influenced Creechurch in reaching its decision to launch the new Syndicate.”
The bulletin also notes that “Takaful Syndicate 3786 will enjoy the ‘A’ security rating afforded to all Lloyd’s Syndicates by Standard and Poor’s, AM Best and Fitch. This strong, stable rating and Lloyd’s history of good faith regarding claims payment will provide confidence to policy holders and capital providers.”
Creechurch said it has “formed a partnership with SALAMA Islamic Arab Insurance Company (SALAMA), which is providing capital backing for the venture by investing in one of Creechurch’s existing corporate members of Lloyd’s. SALAMA is the world’s largest Takaful and Re-Takaful insurance company and is committed to providing Shari’ah compliant insurance and reinsurance solutions for its customers. SALAMA, which means ‘safety’ or ‘to keep safe’ in Arabic, has extensive representation across the Middle East, Africa and the Far East.”
Creechurch CEO Bruce Graham commented: “Lloyd’s has provided the ideal platform to commence this operation. Lloyd’s has a constant appetite for pioneering insurance solutions to meet the specialist needs of customers and to support the growing economies around the world. Lloyd’s have been receptive and constructive in reviewing the governance structures and procedures we have developed for this new activity and will continue to work with us closely as we bring our plans to fruition.
“We are delighted to have identified SALAMA as a long-term partner for Creechurch in this unique venture. Their commitment, experience and profile within the Islamic insurance and reinsurance sectors should help us to participate profitably in what we expect to be one of the fastest growing sectors of the insurance industry throughout the next decade.”
Initially, the Syndicate will participate in the existing business lines of Creechurch, which will be managed in accordance with Islamic Shari’ah principles. Shari’ah compliant reinsurance products (Re-Takaful) will be introduced later in 2006.Creechurch plans to form a new service company to be based within the Dubai International Financial Centre (DIFC).
“The DIFC was established to become a hub for institutional financial services and is committed to supporting the development of insurance and reinsurance in the region, including Islamic products in particular,” the announcement continued. “Creechurch has many years experience of running service companies, which administer insurance business on behalf of the Syndicates it manages. The new service company will recruit a local workforce in Dubai, which will commence trading in the latter half of 2006 once the operational infrastructures are in place and regulatory consents have been received. Initially the service company will focus on Re-Takaful products to support the rapid growth of the Takaful insurance industry.”
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