Rating boost for Gulf Re
Dubai, June 9, 2008
Gulf Reinsurance (Gulf Re) has won a financial strength rating of A- (excellent) and issuer credit rating of “a-” from A M Best Company, an authoritative source of insurance ratings.
Gulf Re is a new specialist reinsurer licensed by the Dubai Financial Services Authority and based in the Dubai International Financial Centre.
The company will initially target high-value oil and gas, industrial, utility and transportation assets primarily in the GCC. It will write a broad range of property and casualty lines of reinsurance, including aviation, energy, commercial transportation, marine, engineered risks and property.
In announcing the rating, A M Best said that in its opinion, “Gulf Re is likely to maintain strong risk-adjusted capitalisation during the company’s initial years of operation, based on conservative performance forecasts and A M Best’s specific insurance start-up criteria. Gulf Re’s initial capital of $200 million has been provided 50 per cent each by Gulf Investment Corporation (GIC) and Arch Capital Group Ltd (ACGL).
“We believe the company will fully capitalise all operating profits up to at least 2013 which will be sufficient to maintain strong risk adjusted capitalisation as the company expands its business during these years. Additionally, a further $200m of capital is held at the holding company that can be transferred to Gulf Re if required, enhancing the company’s capital flexibility.”
A M Best highlighted the “substantial experience of the senior underwriters and management of Gulf Re, the technical support of ACGL through the provision of actuarial and other expertise, low startup costs and the advantageous tax regime.”
In addition, it noted that “Gulf Re’s business profile will be enhanced in the region by the company’s affiliation to GIC.”
“This rating provides independent confidence in the business plan, management, financial strength and long-term stability of the company,” said Gulf Re chief executive officer of Gail Nortsrom. “With this important milestone, we are ready to add depth and width to the GCC insurance market.
“Gulf Re has the strong support of its shareholders and an experienced management team to focus on meeting the needs of clients and sharing best practices with clients, brokers and peers across the region,” said Norstrom.
“During this period of economic growth and diversification, reinsurers like Gulf Re will play an active role in increasing the effectiveness of the financial services sector within the region’s booming economy. At Gulf Re, we are committed to contributing to the long-term growth of this incredibly dynamic market.” – TradeArabia News Service