IslamicFinance.de

London-based firm Cobalt has developed a sharia-compliant insurance platform that uses a syndication model to help spread risk across a panel of underwriters. Cobalt allows multiple insurers to pool their capacity and each can subscribe to the desired level of risk though individual Islamic Windows. The company aims to address capacity constraints in the takaful industry. The platform allows each insurer to have a takaful window, where policyholder funds are segregated from conventional funds, without affecting their rating levels and helping price the risk competitively. The risk is priced by a lead insurer and other firms must then subscribe under similar terms, a similar approach to the subscription model used in London's insurance market.This novel format could boost capacity in the sector.

Insurance major XL Group and Islamic specialist Cobalt underwriters will offer sharia-compliant insurance for companies buying commercial property, paving the way for Islamic investors to tap London’s subscription-based insurance market for the first time. The new offering will allow multiple insurers to take part in Islamic insurance deals, adding scale to the fledgling sharia-compliant insurance industry in the UK. Under Islamic insurance, premiums are reflected as contributions, capital is segregated from the participants' funds and there is transparency on cost. It's necessary to abide by the scholars' principles on how things should be structured.