Dubai Group sells Turkey firm

Dubai Group has sold its Turkish insurance arm to a company owned by former AIG chief executive Maurice “Hank” Greenberg and a unit of Dubai lender Mashreq Bank.

Oman Insurance Co., the unit of Mashreq, said on Tuesday it had bought a 51 per cent stake in Dubai Group Sigorta, an insurance company based in Istanbul which does non-life insurance business.

The remaining 49 per cent was acquired by Starr Insurance and Reinsurance, part of Greenberg’s Starr International Co, OIC said. No financial details of the transaction were provided.

Dubai Group is part of Dubai Holding, and its financial assets include stakes in Borse Dubai, which owns 20.6 per cent of the London Stock Exchange.

Penetration rates for the insurance sector in the Middle East remain low compared with developed markets, with operators under increasing pressure to boost efficiency, roll out new products and explore new markets.

Turkey, the fastest expanding economy in Europe with growth of 8.5 per cent last year, is seen as attractive to foreign insurers looking to diversify away from competitive and mature home markets.

Dubai Group Sigorta was formed in 2008. It made a loss of 34.2 million Turkish lira ($18.8 million), according to its 2011 annual report.