‘The mandate involves completing the viability study, assembling a management team and attracting private sector investors to the project, all within a 12-month timetable,’ says a source close to the transaction.

It is understood that the re-takaful company will be based in Bahrain, have initial paid-in capital of $100 million, will seek a credit rating, and will eventually be listed on the Bahrain Stock Exchange (BSE).

‘Some estimates suggest there are about $2,000 million worth of takaful premiums generated every year in the Islamic world,’ says the source. ‘And there is clearly a need for re-takaful. At the moment, takaful companies are forced to reinsure in the conventional market for the lack of an alternative.’