Dubai: Zurich Insurance Company (ZIC) has been granted a licence to operate in the Dubai International Financial Centre (DIFC).
The company, a relative newcomer to the regional market among the major multinational general insurance players, will focus on reinsurance of large one-off risks on a case by case basis, also known as "facultative reinsurance".
"Zurich International Life, a member of Zurich, was one of the first major international insurance companies to establish a presence at DIFC back in 2005. I am delighted that, by obtaining this new licence, ZIC will further expand its operations here at DIFC through a newly established branch and become a major contributor to further developing the region's insurance market," said Dr Omar Bin Sulaiman, governor of DIFC.
Zurich is the 31st insurance company to be granted a licence by DIFC. "The Middle East has been highlighted by Zurich as one of the key strategic growth areas in emerging markets. We are planning substantial investments in the region in the next few years, and we have a five-year plan which is fairly ambitious," Sa'ad Mered, chief executive of Zurich Middle East, told Gulf News.
"We are going to focus initially on energy, construction, liabilities and speciality lines. Our technical abilities are more appreciated and better delivered in higher complexity projects like civil infrastructure," Mered added.
The potential business opportunities in the Gulf for insurers and reinsurers is well reflected in low density and penetration compared with more mature markets.
It is estimated that less than one per cent of the region's GDP is spent on insurance.
The global economic crisis has brought into focus the need for effective enterprise risk management strategies in the insurance sector, and this will affect how insurers approach reinsurance needs, it is said.
As the regional capacity increases, opportunities to reinsure risks regionally will also increase, rather than transferring them offshore to markets such as London.
By Rachna Uppal
© Gulf News 2009
