Arch Reinsurance to Provide Additional Strategic Support for Gulf Re

December 1, 2014

Arch Reinsurance Ltd. has announced a number of strategic initiatives to provide additional support to Gulf Reinsurance Ltd., a specialty reinsurer based in the Dubai International Financial Centre, founded jointly by Arch and Gulf Investment Corporation (GIC) in 2008.

Arch agreed in principle to acquire complete ownership of Gulf Re, subject to approval by the Dubai Financial Services Authority, according to Arch in a statement released on Business Wire.

To further support Gulf Re’s business in advance of the January 1 renewal season, Arch is also entering into an uncapped 90 percent whole account quota share retrocession arrangement of Gulf Re’s net liabilities and a loss portfolio transfer of all of Gulf Re’s existing business, effective as of October 1, 2014. With these new agreements being implemented, Arch will cancel its existing stop loss agreement with Gulf Re.

Gulf Re will continue to benefit from the relationships of GIC, which will continue to have representation on the board of directors of Gulf Re as well as an ongoing economic interest in the results of Gulf Re. With the new strategic initiatives in place, Arch said that Gulf Re is strongly positioned for opportunities in the marketplace.

At year-end 2013, Arch said, Gulf Re’s score under A.M. Best’s Capital Adequacy Ratio (BCAR) was well above A.M. Best’s capital requirements for its highest rating of A++. Arch estimated that, after taking into account the projected full year underwriting results for Gulf Re during 2014 and without including the benefit of the new quota share and loss portfolio transfer from Arch, the forecasted BCAR score at year end 2014 for Gulf Re remains significantly above the required capital level for an A++ rating from A.M. Best.

Arch Reinsurance Ltd. is a member of Arch Capital Group Ltd., a Bermuda-based company that provides insurance and reinsurance through its wholly owned subsidiaries

Source: Arch Reinsurance

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