DAR AL HARB - U.K.: LLOYD'S OF LONDON & SHARI'AH COMPLIANT INSURANCE

Lloyd’s mulls set-up in Qatar and Islamic insurance products
By Santhosh V Perumal

Lord Levene … looking at all the possibilitiesDOHA: Lloyd’s, the world’s leading specialist insurance service provider, is eyeing Qatar and said it is looking at rolling out Islamic insurance tailored to the needs of the Middle East, where the risk coverage is very low.“We are looking at all the possibilities at the moment as the size and speed of development here is such. It is too early to say but we are taking it very seriously,” Lloyds chairman Lord Levene said here on the sidelines of a conference on project finance, organised by the Middle East Economic Digest.

Qatar’s share in Lloyd’s global business is very low when compared with its global business of $33bn; the energy-rich peninsula contributes only $35mn.“It (Qatar’s share) is a very low number but I don’t think it will stay low for long,” he said.

On the overall Middle Eastern market, he said going by the share in the world insurance, it is less than 1%, and added Islamic insurance, which is gaining ground, should overcome it (the low insurance penetration).When one looks at the investments in this part of the world, many are uninsured and open to risk, he said, adding: “So, there is enormous potential.”

The GCC region has laid out a capital expenditure of over $1.3tn for oil and non-oil projects in the next five years; of which Qatar’s capex alone stand at $130bn.

Going by the project investments, he said insurance penetration in the Middle East would be a lot more than what it was now and it could increase “significantly”.

“If we can develop Islamic insurance more, it makes a whole lot of difference,” he said, adding “We need to develop the products and structures accordingly, so we are looking to Islamic insurance.”Asked whether the UK-based Lloyds was planning to come out with tailor-made Islamic products for the Middle East region, Lord Levene said: “Absolutely. That is what we are looking at.”

But he added that more than the product it was the Islamic insurance structure that mattered because traditional insurance had not been attractive in the region for many reasons.

Earlier, addressing the conference, he said there could be few places in the world experiencing faster growth of project finance than the Middle East.

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Pertinent Links:

1) Lloyd’s mulls set-up in Qatar and Islamic insurance products