The Central Bank of Bahrain (CBB), previously the Bahrain Monetary Agency (BMA), has granted a licence to global reinsurance giant, Hannover Re, to establish an Islamic reinsurance (retakaful) company in Bahrain.
The new firm, Hannover Re Takaful, will be the principal underwriter of Hannover Re’s worldwide retakaful business, predominantly focusing on general and life classes.
Bahrain-domiciled Hannover Re Takaful will be a wholly-owned subsidiary of Germany’s Hannover Re and will have a paid up capital of BD20 million (US$53 million).
Hannover Re, founded in 1966 in Hannover, is among the top five reinsurance groups in the world, with gross written premiums of about US$12.8 billion. The group’s activities span property and casualty insurance, life and health, financial and specialty reinsurance.
Hannover Re Takaful is Hannover Re’s first venture in the Middle East region. The group’s worldwide network comprises more than 100 subsidiaries and affiliated companies, branch offices, service companies and representative offices in 18 countries.
“The establishment of Hannover Re Takaful will be a significant development for the global takaful and retakaful services industry,” said Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy, at the CBB.
“The entry of a major reinsurance player, such as Hannover Re, into the retakaful arena points to the tremendous growth potential of the takaful and retakaful industry.”
The global takaful industry currently comprises 60 companies in 23 countries, with gross premiums expected to grow several-fold in the coming years.
As with Islamic banking, Bahrain has been quick to recognize this potential and, in 2005, effected comprehensive regulations to govern the Islamic insurance and reinsurance industry and enable its growth. The regulations are part of CBB’s Insurance Rulebook, which comprises Volume 3 of the CBB Rulebook.
“The CBB is delighted to welcome Hannover Re Takaful to Bahrain’s mature and well-diversified international financial centre,” said Mr. Al Bassam.
“The volume of financial business in the GCC region is enormous and Bahrain is a well-regulated and reputable jurisdiction for financial institutions.”
This is the second licence to be granted by the CBB to an international insurance giant to establish a takaful or retakaful firm in Bahrain.