Creechurch Underwriting has announced the formation of the first Lloyd's Syndicate to be managed in accordance with Islamic Shari'ah principles.

Stephen Gargrave will be the Active Underwriter of Takaful Syndicate 3786, which will commence trading from January 1, 2006, with an initial underwriting capacity of £41m.

Creechurch said the initiative is the result of research which showed that the Middle East, Africa and Asia has a low insurance penetration, changing attitudes to risk and has witnessed the dramatic growth of Islamic Finance and the introduction of Islamic compliant insurance products such as Takaful in the region.

Takaful Syndicate 3786 will enjoy the A security rating afforded to all Lloyd's Syndicates by Standard and Poor's, AM Best and Fitch.

Creechurch have formed a partnership with SALAMA Islamic Arab Insurance Company (SALAMA), which is providing capital backing for the venture by investing in one of Creechurch's existing corporate members of Lloyd's.

SALAMA, which means “safety” or “to keep safe” in Arabic, has extensive representation across the Middle East, Africa and the Far East.

Bruce Graham, CEO of Creechurch, said: “Lloyd's has provided the ideal platform to commence this operation. Lloyd's has a constant appetite for pioneering insurance solutions to meet the specialist needs of customers and to support the growing economies around the world.

"Lloyd's have been receptive and constructive in reviewing the governance structures and procedures we have developed for this new activity and will continue to work with us closely as we bring our plans to fruition."

Initially, the Syndicate will participate in the existing business lines of Creechurch, which will be managed in accordance with Islamic Shari'ah principles.

Shari'ah compliant reinsurance products (Re-Takaful) will be introduced later in 2006.

Creechurch said it plans to form a new service company to be based within the Dubai International Financial Centre (DIFC).

The new service company will recruit a local workforce in Dubai, which will commence trading in the latter half of 2006 once the operational infrastructures are in place and regulatory consents have been received. Initially the service company will focus on Re-Takaful products to support the rapid growth of the Takaful insurance industry.