National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
169
Looking at the broader category of asset management which would include, for example, the
management of discretionary portfolios, global data is not readily available, but, within Europe,
the European Fund and Asset Management Association gives some data for assets under
management (AuM) across Europe. Table 5.2 shows the data for AuM as a percentage of GDP
are interesting as an indication of the significance of the asset management sector in the
economy.
Unfortunately, Luxembourg is not identified separately in the table but from the figures
already quoted it must account for the lion’s share of the “Rest of Europe” figure with the
further implication that discretionary portfolios (which in the European totals account for
slightly more than investment funds) are a relatively small part of the picture in Luxembourg
and Germany but a very large one in London.
Insurance is a somewhat different business, because for historic regulatory reasons it is
common for major international insurance groups to set up locally-domiciled subsidiaries as
separate legal entities to undertake their primary insurance business in any jurisdiction. (So,
for example, the Allianz Group is headquartered in Munich, but much of the group’s business
will be booked in its 70 or so operating subsidiaries around the world.) Reinsurance, however,
is an international business, as to a lesser extent are certain types of large commercial risk. The
USFIO (2014) quotes the following figures for reinsurance premiums written in 2013 by
domicile of the ultimate parent; the dominance of Germany is particularly obvious.
Table ‎5.3: Reinsurance premiums 2013 by domicile of parent
Location Percentage of Total (%)
UK43 8.6
Germany 27.3
Switzerland 15.6
Other
European
10.2
Americas 15.6
Bermuda 11.3
Asia-Pacific 11.3
Other 0.3
Source: US Federal Insurance Office (2014)
Another approach to understanding the significance of the five centres as international
financial centres is taken by the GFCI (2015), produced by Long Finance. The Index is based on
both so-called “instrumental” factors and the opinions of financial services professionals.
Partly as a result, it has some methodological problems which lead to volatility in the outcomes
and indeed to some possibilities to “game” them 44. But it does provide a different perspective.
The rankings of centres located in the relevant countries ranked among the top 50 centres
internationally are shown in Table 5.4.
43 This figure is in fact quoted as “London”, but since there is no material reinsurer headquartered in the UK outside London,
the two may be regarded as the same.
44 It is, for example, hard to find objective reasons why Riyadh should fall from 14th place to 57th in 6 months, or why Osaka
should rise from 31st to 20th over the same period.