A 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.”