The Dubai International Financial Centre Authority (DIFCA) on Friday released a comprehensive publication on how to conduct Re-Insurance and captive business in or from the DIFC. Titled “Guide to Re-Insurance and Captives in the DIFC”, the publication is aimed at supporting the insurance industry inside and outside the DIFC. The publication provides an overview of the core issues of interest to (re)insurers, brokers, underwriting agencies, businesses considering establishing or managing a captive insurer, insurance service providers and back-office support functions that are looking at establishing a presence in the Dubai International Financial Centre Authority to carry out business across the region. Abdulla Al Awar, chief executive officer of the DIFC Authority, said: “The potential for the development of the insurance industry across the DIFC region is huge. The historically low insurance penetration levels seen from within the region are likely to grow exponentially over the next few years to those experienced in more developed markets. The DIFC continues to receive a great deal of attention from the global insurance industry who recognize the promise shown by the centre to become a regional hub. “Keeping the rising growth and the vast potential in mind, the Guide to Reinsurance and Captives in the DIFC has been prepared to not only assist those who are interested in undertaking insurance business in or from the DIFC, but it will also be of interest to those who provide support functions and services to insurance businesses across the region,” Al Awar added. Wayne Jones, partner and head of Clyde & Co's (re)insurance team in the Middle East, said: “The publication arrives at a time when many international insurers are looking to establish or consolidate a regional footprint to concentrate on the opportunities presented in the Middle East. “Our team has been involved with helping insurance interests accomplish this by setting up in the DIFC since 2004. It has been a pleasure working with DIFCA to produce what we hope will be a useful resource for the insurance industry, and will continue to stimulate interest in the DIFC and the region generally,” Jones added. The DIFC Authority has been striving to increase awareness of modern methods of finance and managing risk in the region and part of the efforts are aimed at bringing best-of-breed practices, technologies and expertise to the region's insurance industry. Low penetration levels are attributable to a combination of factors, with the main factor being a general lack of insurance awareness with regional firms. However, with economic development, growing industrialization, rapid growth of international trade, international mergers and acquisitions, improved regulation and increased focus on corporate governance, the region is witnessing a change of attitudes towards corporate risk management, and a growing awareness of the need for innovative ways to finance the future cost of corporate risk. In view of the recent turbulent finance and insurance markets, volatile premium fluctuations and reduced capacity, regional firms are now looking beyond the traditional insurance markets and assessing alternative opportunities.
