The Bermuda-based Arch Capital Group Ltd. and Gulf Investment Corporation (GIC) announced that they have entered into a joint venture agreement to establish Gulf Re, a new specialist reinsurer to be based in the Dubai International Financial Centre.
Arch Capital and GIC will subscribe to a total of $400 million of capital. The initial paid up capital of Gulf Re will consist of $200 million, with an additional $200 million to be funded depending on the business needs of the company. Gulf Re will be owned by Arch Capital and GIC equally.
Arch’s bulletin explained: “Gulf Re will initially target high-value oil and gas, industrial, utility and transportation assets primarily in the six member states of the Gulf Cooperation Council (“GCC”) which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. The company will write a broad range of property and casualty lines of reinsurance, including aviation, energy, commercial transportation, marine, engineered risks and property, on both a treaty and facultative basis.
“Gulf Re underwriting activities are expected to commence during the first half of 2008, subject to receipt of the necessary regulatory approvals from the Dubai Financial Services Authority.”
Arch’s President and CEO Dinos Iordanou added: “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. Arch has extensive experience in the lines of business that will be focused on by Gulf Re.”
He also noted that the partnership with GIC assures that “Gulf Re will be well-positioned for opportunities in the marketplace,” and would “also benefit from an outstanding management team.”
GIC CEO Hisham Al-Razzuqi noted: “Gulf Re will meet the need for a Gulf based reinsurer with significant financial resources and specialist expertise. The company will add depth to the GCC insurance sector and support the growth of GCC insurers. Gulf Re will benefit from the technical expertise and support of Arch Capital, widely recognized for the quality of its management. The resources of both joint venture partners will provide strong support to Gulf Re as it builds its reinsurance business.”
38-year industry veteran Gail Norstrom will head Gulf Re. He previously served as a Managing Director of Aon Risk Services Property Practice Group. Prior to joining Aon, he served Industrial Risk Insurers in various senior executive capacities, including President and CEO. Gulf Re core management team includes four additional senior executives with many years of experience in Europe and the United States with leading European and U.S. insurance firms.
Source: Arch Capital Group – http://www.archcapgroup.bm
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