Leading international law practice, Norton Rose has advised on the launch of Cobalt Underwriting, the first Shariah-compliant underwriting agency. Based in the Lloyd’s building, it is backed by investment from Capita and the Bank of London and Middle East, the largest western Shariah-compliant financial institution.
Cobalt has entered into an agreement with global broking group Aon which will work exclusively with Cobalt across the initial process development phase of the business which is expected to last until September. Norton Rose has provided legal advice for the project to date and going forward will continue to do so.
Cobalt has secured underwriting capacity from XL Group to underwrite property risks out of London. The initial focus will be on property cover, with maximum capacity of up to USD300 million. The products will be offered on a worldwide basis with the exception of the US and Canada.
The Norton Rose team advising on the launch was led by partner and Head of the Islamic Insurance team, Susan Dingwall and included Farmida Bi, Ffion Flockhart, Bob Haken, Sara Faraj and Martin Schneider.
Susan Dingwall comments:
“This is a first for the industry and we are delighted to be a part of it. We have been advising on Sharia-compliant insurance for a number of years and seen demand for it grow substantially, particularly from Islamic financial institutions and as part of Islamic financings on major projects and property developments.
“The launch of Cobalt will be a real boost to the development of the commercial market for Sharia-compliant insurance.”
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% to $85 billion in 2011 alone and the growth in the Islamic banking industry was put at 16.4% for the year.
Richard Bishop, Chief Executive Officer, Cobalt Underwriting said:
“We are pleased to announce what is an exciting and market changing initiative that will open up new opportunities for major businesses seeking Shariah-compliant re/insurance capacity.
“We are delighted to be in a position to work with market leading companies that includes Capita which will not only be significant investors but also deliver high quality administration and processing support.
“Discussions with customers, brokers and capacity providers are ongoing and we have been extremely encouraged with the response and interest received as we work to expand the range of products we are able to offer to a market with huge potential. We believe that what we are creating will bring a new dynamic to the provision of insurance and reinsurance to organisations requiring Shariah-compliant products.”
Jason Harris, Chief Executive International P&C Insurance for XL Group, commented:
“We are delighted to be the first global insurer in the London market to offer commercial Shariah compliant insurance capacity to large and middle market companies via Cobalt Underwriting. This is a growing untapped market and as we explore other product offerings, we are looking forward to help develop it.”
“Working closely with Cobalt, which had a prominent Shariah advisory board, we are well placed to put our vast experience in property risks to work for clients seeking this type of cover. While we expect a significant proportion of the business to come in through the London market, our network, which allows us to serve clients in more than 140 countries, represents a unique asset in serving this important market segment.”
Norton Rose’s market leading Islamic insurance team has won “Best Takaful (Islamic Insurance) Law Firm” at the International Takaful Summit every year since 2008, when the award was first launched.
