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6.4. Case Study: The United Kingdom
6.4.1. Background
The UK financial sector is considered as one of the world’s most efficient financial centres. The
global significance of the UK financial sector is seen in key statistics relating to the financial
services industry (Rhodes, 2019). The UK economy witnessed a total of GBP 119 billion
contributions to it in 2017, which amounted to 6.5% of the total economic output in the country.
Being the leading financial centre, London generated about 50% of the financial sector’s output.
In 2016, among the OECD countries, the UK financial sector was identified as the eighth largest
based on its economic output. With a 3.5% of the world’s GDP, 16 the UK’s insurance spending in
2017 was 12.80% of the total GDP. The national insurance market share of the UK relative to the
OECDmarket is 7.80%. With the UK being the fifth largest economy in the world and considering
its ambition to become a global Islamic hub with significant amendments to its financial laws
and regulations and further governmental policies to tap into the Shari'ah-compliant bonds
(Sukuk) market, the UK is chosen as a non-OIC country for the case studies.
According to TheCityUK Report 2019, the UK is still the leading western centre for Islamic
finance, in view of its historical role in establishing a level playing field for different financial
structures (TheCityUK, 2019). The CBRE Group reported that a significant 44% was invested in
London, out of the US$ 13 billion investments of sovereign funds and business from the Middle
East. The London Stock Exchange has also attracted a large number of Shari'ah-compliant funds
and Sukuk. In the year 2014, the UK Government issued its first Sukuk, which were listed on the
London Stock Exchange. This was followed by more than 70 Sukuk issuances afterward, with a
combined value of over US$ 53 billion (TheCityUK, 2019).
The UK insurance sector provides a unique global centre of high-level expertise for insurance
protection for businesses and people across the world. With tax-efficient models, the UK
insurance sector focuses on innovative solutions and uncommon commitment to global needs
across different geographical divides. The UK insurance sector, when combined with the overall
financial services industry, contributed GBP 119.1 billion to the economy. It amounts to 6.5% of
the total economic output for the period (se elow).
16 IMF International Monetary Fund. April 2019. Retrieved 2
May 2019.