Gulf Investment Corporation (GIC) and Arch Capital Group have announced a joint venture agreement to establish Gulf Re Company, a new specialist reinsurer to be based in the Dubai International Financial Centre.
Hisham Al Razzuqi, CEO of GIC, said the GCC reinsurance market reached $4.5 billion (Dh16.52bn) in 2007, increasing by 17.5 per cent annually. “More than 90 per cent of the regional reinsurance market goes to foreign companies, so Gulf Re will have high potentials in the region. High economic growth rates in the region also create major opportunities for the insurance and reinsurance industry, so Gulf Re’s main focus will be the GCC market. We also have long-term plans to expand our operations in the Middle East and other parts of the world,” he said.
Al Razzuqi said Gulf Re is waiting for the final approval from the DIFC to launch its operations from Dubai during the next few months.
“The new company will be a combination between regional and international expertise in the insurance and reinsurance markets.
GIC has long-term strategic plans for investments in high quality areas and the reinsurance sector is part of this strategy. Also Arch Capital is a leading global reinsurer and this joint venture will help bring international expertise to the region,” he added.
Dinos Iordanou, President and CEO of Arch Capital Group, said the group is widely recognised for the quality of its management. “The GCC is home to a large and fast growing, state-of-the-art tangible asset base, built and operated to the highest standards. The joint venture will allow Arch to expand its platform in a region where there is a strong need for local reinsurance capacity and specialist expertise for these assets.”
GIC and Arch Capital will equally own Gulf Re and they will subscribe to a total capital of $400 million. The initial paid-up capital will be $200m. The company will target high-value oil and gas, industrial, utility and transportation assets primarily in the six member countries of the Gulf Co-operation Council. The reinsurance schemes will cover aviation, energy, commercial transportation, marine, engineered risks and property.
$400m: GIC and Arch Capital will equally own Gulf Re and they will subscribe to a total capital of this amount. The initial paid-up capital of the new firm will be $200m
Arch Capital and GIC launch reinsurance company