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UK: The demand for Shariah compliant
products in the Western world is rising as Islamic investors from the Arab
Gulf channel investments into major developments in the UK and Europe.
“There are an increasing number of major projects that have been announced
this year in London, the UK and Europe which are backed by Middle Eastern
and Islamic investors,” confirmed Richard Bishop, CEO of Shariah compliant
managing general agent Cobalt Underwriting based in London, which was
recently engaged as the insurer of preference for the UK’s first Nationally
Significant Infrastructure Project in Kent.
The project – the proposed London Paramount Entertainment Resort worth GBP3
billion (US$4.7 billion) and backed by Hollywood giant Paramount Studios –
was awarded the Nationally Significant Infrastructure Project status due to
the grand scale of the undertaking which is expected to greatly bolster the
Kent economy by means of investments and job creation which will transform
the Swanscombe peninsula. Positioned to rival Euro Disney as a major family
attraction, the venture – whose initial stages are largely funded by Middle
Eastern wealth – is anticipated to create some 27,000 jobs.
With the possibility of Islamic investors financing the entire project,
these investors are keen to proceed with the venture in a Shariah compliant
manner including with regards to insurance and this has opened up
opportunities for the country’s Takaful segment. “We feel sure that the
demand for Shariah compliant options when it comes to insurance will
continue to grow and we are working with leading underwriters both inside
and outside of Lloyd’s and the London market to provide the capacity to
meet these demands,” shared Bishop, who also cautiously explained that:
“Cobalt will have the opportunity to provide the Shariah compliant options
for clients to consider and will always be asked to at least provide terms
on each risk. We will, however, need to be competitive.”
Bishop revealed that the first insurance covers are already in place and
contracts for property owners’ liability as well as environmental
impairment liability have been issued.
Work on the London Paramount Entertainment Resort is expected to commence
in two years’ time in time for its opening in 2020. The resort builds on
the other GBP17 billion (US$26.64 billion) investment opportunities
highlighted by the UK Trade and Investment specifically for Shariah
investors.
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Ijarah companies can still thrive by focusing on their
product base
A common misconception in the leasing industry is that banks are their
primary rivals. This mistaken belief permeates most companies, irrespective
of the mode they offer; including the ones extending Ijarah services. What
this results in is leasing companies engaging in endless losing battles of
‘price wars’, as banks will always have access to cheaper funds. That being
said, leasing companies do not exist in their own universe; banks are
present in their operational space. But once leasing companies really
understand their clients’ needs, along with the attributes of their
products, it becomes clearer that banks are not their direct competitors.
In order to appreciate this view, leasing companies must embody the notion
that: “The customer’s perspective is your reality (Kate Zabriskie).”
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