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Dubai: Kuwait-based Gulf Investment Corporation (GIC) said on Monday it has tied up with Bermuda-based Arch Capital Group in an equal partnership to launch a reinsurance firm that will focus on large-scale infrastructure and industrial projects in the Gulf.
To be based in the Dubai International Financial Centre, Gulf Re will have a capital of $400 million (Dh1.47 billion), officials said.
"Gulf Re will initially target high-value oil and gas, industrial, utility and transportation assets," the companies said in a joint statement.
Gulf target
The company hopes to become a major regional player in the reinsurance business, currently dominated by companies based in Europe, the US and tax havens such as Bermuda.
"Gulf Re will meet the need for a Gulf-based reinsurer with significant fin-ancial resources and specialist expertise," said GIC chief executive officer Hesham Al Razzuqi.
He said the new company will combine expertise of GIC, an investment firm owned by the six GCC countries, with Arch Capital's experience in the insurance and reinsurance business.
Gulf Re hopes to start its underwriting activities in the first half of 2008 and is waiting for regulatory approval from the Dubai Fin-ancial Services Authority.
The company does not intend to enter the primary insurance business or sectors such as healthcare, life and vehicles, Al Razzuqi said and described the venture as a "strategic long-term investment for GIC, in line with our mission to develop financial services in the GCC."
The company will write a range of property and casualty lines of reinsurance, including aviation, energy, transportation and marine on both treaty and facultative basis.
Gulf Re chief executive officer Gail Norstrom said the region's reinsurance business will grow in tandem with strong growth in primary insurance premiums.
"There is an annual growth of 17-25 per cent in insurance premiums in the categories of businesses we are targeting," Nor-strom told Gulf News.
He estimated the size of reinsurance business close to $1.3 billion in those sectors, including infrastructure, industrial and large construction projects.
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