Lord Levene says that Middle East, China and Brazil offer more opportunities for growth than US
Lloyd’s intends to offer Islamic insurance as part of its expansion in emerging economies, Chairman Lord Levene has said.
In an interview with Bloomberg, Levene said that Lloyd’s was “looking at how we get into” the Islamic insurance market, known as Takaful.
He said: “[The Middle East] makes up less than 1% of the world’s insurance market, and that’s an interesting area to explore.”
Financial products that comply with Islamic law have attracted more than $250bn globally - up 24% in the past five years.
In 2006, HSBC estimated that the global market for Takaful could soar to $14bn by 2015. Premiums are currently growing by about 40% a year, fuelled by economic growth in the Gulf Arab states.
Levene added that the Middle East, China and Brazil offer more opportunities for growth than the US, currently Lloyd’s largest market.
Insurers including AIG, Allianz and Swiss Re already offer Takaful products.
Charles Bouloux, AIG’s president for the Middle East, Mediterranean and South Asia, added: “There’s enormous potential for Takaful as uninsured markets become insured as awareness of Islamic financial products grows.
“It’s not just in the Middle East and Asia either. We see potential in the US, France and the UK.”
Many Muslims reject conventional insurance because Muslim scholars say it breaks Islamic Shariah law’s proscriptions against betting on future events and interest payments.