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6.3.3. Case Studies
The development of Takaful in the UK and the experiments over the years is a mixed bag of both
successful and unsuccessful initiatives. Hence, this case studies focuses on two successful
models: Cobalt and Takaful Alternative Student Finance.
Model 1
Cobalt Underwriting
In 2012, Cobalt Underwriting was established in London as a Shari'ah-compliant
underwriting agency. It is a cover holder of Lloyd’s and launched its first product in 2013.
While operating out of London, Cobalt offers Shari'ah-compliant products and services to
support different forms of activities across the world. Some of the services provided by Cobalt
include providing a platform for surplus sharing, Shari'ah compliance assurance,
development of Shari'ah-compliant investments. It was recently announced that Cobalt
enabled the distribution of surplus to charity. Chaucer Syndicate operates a Takaful window
through the services provided by Cobalt, and it consequently announced that it donated a
surplus of GBP4,700 (US$ 5,851.47) to the Teenage Cancer Trust in London. The surplus
emanated from its operations during the first year of 2015 (IFN, 2019).
Cobalt is regulated by the Financial Conduct Authority and also has its self-imposed Shari'ah
Supervisory Board with an additional in-house scholar. Cobalt does not carry any risk but
provides underwriting agency services through London-based insurance companies who
operate Islamic “windows”. The Cobalt model is not the typical retail Takaful available in
Muslim-majority countries. While the structuring of the model is based on all relevant Takaful
principles, this unique model is a syndicated placement format which is well known in the
London subscription market. It is adequately structured not to only comply with the Shari'ah
principles but to also comply with specific regulatory and prudential requirements.
As illustrated in the Cobalt model involves the payment of premiums by
contributors, which are paid directly to Cobalt. However, the broker can pay on behalf of the
client if he has a Shari'ah -compliant bank account. As for claims, they are submitted to Cobalt
who reviews them before making the settlement as per the policy conditions. One unique
practice in Cobalt, which is not found in the main Takaful financial centres is the Shari'ah
verification of claims made by contributors. This review is made to ensure the claim itself
does not contract any principle of the Shari'ah . Claims are not settled through brokers but
paid directly to the contributors or cedant. Brokers are paid a fee or commission, which is
recognised under the Shari'ah.