british islamic insurance holdings announces the appointment of gulf international bank and investec as its financial advisors

Published July 27th, 2007 - 02:56 GMT

After its recent announcement to increase its paid up capital, the Board of British Islamic Insurance Holdings (BIIH) announced its decision to appoint Bahrain-based Gulf International Bank B.S.C. as the Company’s GCC Financial Advisor, and Investec Bank (UK) Limited, as its UK Financial Advisor.

BIIH recently announced that it intends raising £80 million paid up capital by the time of launch of business in the first quarter of 2008 to meet the capital adequacy requirements associated with the business plan submitted by the Company to the FSA. BIIH raised £19 million paid up capital in 2006 and has decided to raise the additional capital in two tranches: (i) through a Private Placement in the UK and Gulf region during the summer of 2007; and (ii) through additional fundraising closer to the launch of the Company’s business in the first quarter of 2008.

GIB is one of the largest regional banks in the GCC, with more than US$27 billion of its own assets and US$22 billion of clients’ assets under management. With a proven track record spanning more than 30 years, GIB provides client-led, innovative financial products and services to a wide customer base in the region, including investment banking, treasury services, asset management, project and structured finance, and Islamic banking.

Backed by a highly qualified, dedicated team of professionals in Manama, Riyadh and Abu Dhabi, and supplemented by offices in London and New York, GIB provides specialized financial advisory services to a wide range of public- and private-sector clients in the Middle East. New York-based Global Finance magazine has recently named GIB as the “Best Equity Bank in the Middle East/Africa” after conducting a survey of the world’s best investment banks. GIB was selected for the award because, among other things, it has been the exclusive financial advisor for most major IPOs in the Kingdom of Saudi Arabia in recent years and because of its leading role in corporate advisory.

Investec is an international, specialist banking group that provides a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other geographies. The group employs approximately 5400 people world-wide.

Investec is focused on providing its investment banking service offering to the UK small and mid-cap market.  Investec is focused on growing companies from £50m to >£1bn and has long-standing relationships with a wide range of clients including listed companies, private businesses and private equity funds. UK Small Cap Fund Managers rate Investec as No.1 AIM broker.

Investec has a dual listing on the London Stock Exchange and Johannesburg Stock Exchange and has a market cap of approximately $8 billion.

Commenting on the appointment of the investment banks, Sh. Abdulaziz Hamad Aljomaih, the Chairman of BIIH said: “We are delighted to appoint two premier investment banks as the GCC and the UK financial advisors to the Company’s private placement of its New “A” Shares.  The selection of GIB and Investec is consistent with the Company’s established approach of working with blue chip advisory teams to help its board establish a world-class Takaful firm in the UK.”

BIIH, in an innovative move, will be the first company to offer Shari’a compliant insurance products to the British Muslim population from an FSA-authorised and regulated, stand alone Islamic insurance company.   Following the formation of the company in 2006, £19 million (approximately $38 million) was raised from institutional and private investors in the Gulf Region who subscribed for shares in BIIH following a Private Placement which took place during the summer of 2006.  An additional £1 million committed for subscription by the Core Founder at the time of FSA Permission takes the total committed capital to £20 million.

BIIH has a vision to become the Islamic insurance partner of choice for Muslims in the UK and Europe, following strong research which shows a substantial market potential for a Shari’a compliant insurance offer from a focused and trusted Islamic insurance provider.  The business has also identified opportunities to use a Takaful based insurance solution for the fast growing ethical market.

The UK insurance industry is the largest in Europe and the third largest in the world after the USA and Japan. The UK’s annual per capita insurance spend is approximately £2,500 (US$5,000), which is the second highest in the world after Switzerland (as of 2005). Most people in the UK purchase some form of insurance and over 60% of households in the UK subscribe to home-related insurance, while more than 70% are covered for motor insurance. A comparison of the insurance penetration in the UK with that of the GCC region suggests that the UK’s per capita insurance premium in 2005 was 35 times more than that of the GCC region. In 2005, total general insurance premiums in the UK were £32.2 billion (US$64 billion) and long-term insurance premiums were £100 billion (US$200 billion) .

A UK survey conducted by BIIH indicated a strong preference for Shari’a compliant insurance solutions amongst UK Muslims with 50% responding that they are ‘extremely likely’ or ‘very likely’ to buy Motor Takaful as long as all aspects of the policy, including cost and level of cover, are comparable with their existing conventional insurance policy. A further 26% said that they would be ‘fairly likely’ to buy Motor Takaful. The corresponding figures for Household Takaful were 46% and 28% respectively.

British Islamic Insurance Holdings has its offices in Central London. Its creation was led by Gulf Ventures Corporation (GVC), Bahrain.  GVC worked with a number of leading international consulting firms and project managed the FSA regulatory application preparation process from conception to completion.  GVC worked with Ernst & Young and KPMG in the UK, and Mercer Management Consultants provided takaful advisory services.  Norton Rose provided legal advise and GVC worked with one of Europe’s premier actuarial consultants, EMB Consultancy. GfK NOP, a leading market research company, helped GVC in conducting primary research in the UK to assess the interest of British Muslim population in a takaful proposition in the UK.



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