Islamic Insurance: Bermuda’s ‘Clever Play’

April 19, 2011

Paula-A-CoxA study by Ernst & Young on Islamic insurance — takaful and retakaful — undercores impressive growth in the market and Bermuda’s new emphasis on attracting this business is a shrewd strategic move, says a leading re/insurance trade publication.

“Reactions” said today [Apr.18] that Bermuda’s decision to begin marketing itself as a centre for Islamic insurance and reinsurance is “a clever play” by the island.

Global takaful contributions to the global re/insurance market grew by 31 percent in 2009 to reach $6.9 billion according to the Ernst & Young report. In 2010 they climbed to $9.15 billion and are expected to reach $12 billion this year.

The takaful industry is concentrated mainly in the Middle East and North Africa and south-east Asia regions, with Saudi Arabia, Malaysia and the United Arab Emirates being the top three takaful markets globally, reported “Reactions.”

“Interestingly, this growth potential hasn’t gone unnoticed in Bermuda of all places,” said the industry journal. “The offshore domicile is marketing itself as a centre for Islamic finance, insurance and reinsurance. Premier and Finance Miniser Paula Cox [pictured at top] recently led Business Bermuda trade delegations to the Middle East and then to London to promote the island as an Islamic financial centre.”

A Bermuda Finance Ministry feasibility study into Islamic finance concluded  there are no major legislative or regulatory impediments to introducing Islamic financial product offerings in Bermuda.

“So Bermuda could have the full range of supporting services, from Islamic insurance and reinsurance through to the necessary investments that such companies could access,” said “Reactions.”

“It is a clever play by Bermuda. Unlike an organisation such as Lloyd’s, Bermuda can’t set up shop in an emerging economy or region. So they are bringing the emerging market business to them. In other words, if the mountain won’t come to Mohammed, the hope is that Mohammed will go to the mountain.”

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  1. Michael M Fahy says:

    The initiatives by the Government in marketing Bermuda as a centre for Islamic banking and finance are commendable. This is a potentially very lucrative area which could see another strand of business be added to the Bermuda portfolio. This is welcome in these uncertain economic times. However, on examining the list of countries whose nationals require Bermuda entry visas I note that UAE, Bahrain, Saudi Arabia, Jordan, Egypt, Kuwait and Pakistan all appear on the list - see here:

    It is my understanding that Bahrainis, for example, need to send their passport to the British embassy in Dubai for their passport to be properly processed for a Bermuda entry visa - which can take weeks. This means that potential businessmen, if they wanted to visit Bermuda and do business here, would need give up their passports for a few weeks - which is something they may not want to do. The BDA raised this issue with the relevant Ministers in the Bermuda government some time ago but we have had no response to our queries.

    It may be that the UK Government will need to be approached to make it easier for Bahraini and other nationals from Islamic financial centres to visit Bermuda and invest here. I hope all is being done in this regard.

    In addition given some of the strife in the Middle East, it is actually becoming difficult to the point of being prohibitive, for nationals and companies of some of these countries to in fact invest in the West. This is due to sanctions, extra checks on clients from these jurisdictions and simple ignorance on the part of many in respect of doing business with companies and nationals from the Middle East. This will require a careful balance but it is doable. First though we need to sort the visa situation!

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  2. Dragging A Lure says:

    Come On Michael,
    "It may be that the UK Government will need to be approached to make it easier for Bahraini and other nationals from Islamic financial centres to visit Bermuda and invest here. I hope all is being done in this regard."
    The above quote from you is pure political rhetoric and used to mislead the public. You as a lawyer and finacial spokesperson for the BDA should know that the Governor, British and American Governments are involved in the processes and we are following the same immigration guidelines used by the British Government. What is your point? By the way name the relevant Ministers that BDA approached.

    Cheers

    Drag

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  3. bigjibz says:

    Are the muslim community in bermuda going to be able to secure interest free loans and services here as well?

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  4. GlobalCitizen says:

    what is the definition of Islamic insurance? & is there other religious Insurance?? this is the first time i have ever heard of this..

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