One area which the UK will likely seek to develop, especially in the wake of Brexit, is the domestic takaful sector.
Ms Stella Cox, director of DDCAP Group and chair of TheCityUK’s Islamic Finance Market Advisory Group, believes Lloyd’s of London is interested in promoting takaful and other Islamic insurance products and services, according to a report by Salaam Gateway.
In 2018, the Islamic Insurance Association of London (IIAL) released guidelines to address capacity constraints and challenges for takaful and retakaful with the aim of supporting the sector. The guidelines followed the initial set released in 2016.
“The IIAL works under the auspices of the Lloyd’s platform and is seeking to ensure that the market operating environment is sufficiently enabled for shariah-compliant business to grow further,” she said.
“Overseas investors have shown interest in establishing shariah-compliant syndicates, and we have a shariah-compliant insurance underwriting agency within Lloyd’s. Lloyd’s members offer a range of Islamic products and services across a range of assets and requirements.”
But others said the scope for the development of Islamic insurance in the UK is limited.
“The takaful industry remains small globally, and even if we start to see some growth in the UK, we are of the view that it will remain rather small in absolute terms and relative to the insurance industry in the UK,” said Mr Mohamed Damak, senior director and global head of Islamic finance at S&P Global Ratings.
He points to a lack of appetite from clients and lack of standards.
“As in other markets, takaful companies will need to develop competitive products, and do a better job in promoting their offerings and differentiating themselves from conventional insurers in order to grow,” he said. M