Swiss Re gets nod for Malaysia Islamic reinsurance

KUALA LUMPUR Oct 9 (Reuters) - Swiss Re RUKN.VX, the world's No. 2 reinsurer, has won Malaysian central bank approval to start up an Islamic reinsurance business in the Southeast Asian country. "This new licence will allow us to consolidate and enlarge the scope of our efforts by also providing general retakaful solutions," said Marcel Omar Papp, head of Swiss Re's Retakaful unit, in a statement late on Thursday.

He said the composite licence allows Swiss Re to offer family and general Islamic retakaful, or reinsurance, globally.

Zurich-based Swiss Re said takaful premiums of about $1.7 billion were written in 2007, and estimates that the global takaful market could more than quadruple to $7 billion by 2015.

Islamic insurance involves the sharing of both risk and reward by insurers and policyholders, and it is becoming increasingly popular in Muslim countries.

But the industry is relatively small and many takaful firms cede part of their risks to conventional reinsurance firms because there is a lack of Islamic reinsurance capacity. (Reporting by Niluksi Koswanage; Editing by Jan Dahinten)