Dubai Welcomes First Islamic Insurance Firm To DIFC

by Lorys Charalambous, Tax-News.com, Cyprus

02 January 2006

Takaful Re Limited, an Islamic insurance company, has been licensed by Dubai Financial Services Authority (DFSA) to operate from the Dubai International Financial Centre (DIFC).

Takaful Re is dedicated to offer Shari’ah compliant reinsurance and related services to the growing Takaful & Islamic insurance markets. Takaful Re will offer reinsurance capacity in all major lines of property, marine and family Retakaful business.

Because profits in the conventional insurance industry are effectively derived through gambling on uncertain outcomes the world of insurance has been largely off limits to those wishing to invest along Shari'ah principles. However, this problem has been overcome with the development of the takaful insurance industry.

Using the Islamic principle of Ta'awun, or mutual responsibility, the takaful industry rests on the same ideal of profit and risk sharing as other areas of Islamic finance. On a basic level, it provides mutual protection of assets and property in the event of loss or damage based upon joint risk sharing.

With an authorised capital of US$500 million and paid-up capital of US$125 million, Takaful Re has plans to focus on retakaful business in the Middle East, North Africa and other Islamic countries.

“This is a significant announcement for DIFC, especially when we already have some major international insurance companies located here," commented Dr. Omar Bin Sulaiman, Director General of the DIFC Authority.

”The DIFC is committed to actively promoting the growth and development of the Islamic insurance industry in accordance with Shari'ah principles. The Takaful market is one of the fastest growing in the world. It is expected to grow at nearly 20 per cent per annum to reach US$7.4 billion in global annual premiums in 15 years. Firms domiciled in the DIFC will complement the regional market and help it grow. By providing the ideal environment, both in terms of regulations and infrastructure, the DIFC aims to maximise this potential," Dr. Omar Bin Sulaiman added.

Meanwhile, Mr. Khalid Ali Al Bustani, Takaful Re Chairman, commented that: “We are pleased to associate ourselves with the DIFC which is renowned internationally. For Takaful Re, to be in the DIFC is a commitment for integrity, transparency and efficiency."

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