Arch Reinsurance Ltd. , Bermuda (Arch Re), is pleased to announce the formation of Arch Underwriters (Gulf) Limited (AUGL) to be based in the Dubai International Financial Center (DIFC), UAE, subject to final approval from the Dubai Financial Services Authority (DFSA). AUGL will have underwriting authority for Arch Re, which holds a financial strength rating of ‘A+’ from Standard & Poor’s.
AUGL will supplement Arch Re’s existing operating entity in the DIFC, Gulf Reinsurance Limited (Gulf Re). Arch Re completed the acquisition of Gulf Re in May 2015 from its joint venture partner, the Gulf Investment Corporation (GIC). As part of that process Arch Re put in place the following two reinsurance arrangements to demonstrate its full commitment to Gulf Re:
- A Loss Portfolio Transfer Agreement whereby Arch Re assumes 100% of all liabilities in respect of business written by Gulf Re prior to 30 September 2014.
- A Quota Share Agreement whereby Arch Re assumes 90% of all liabilities in respect of business written by Gulf Re after 1 October 2014.
All existing Gulf Re clients and brokers will be provided the opportunity to renew, through AUGL, with the more highly rated paper of Arch Re Bermuda.
“When we stepped back and considered the best value proposition to Gulf Re’s GCC clients of, it made sense to provide Arch Re’s A+ rated balance sheet directly to our cedants, given Arch Re’s 100% ownership of Gulf Re, “ said Shankar Majrekar, AUGL’s Senior Executive Officer.
AUGL will benefit from the local knowledge and experience of the current Gulf Re underwriting team, which will continue to service all the in-force business of Gulf Re in a seamless manner from its offices situated in the DIFC. AUGL’s objective will be to maintain and build on existing client relationships.
Gulf Re’s paid up capital of USD 70 million and DFSA license will be maintained by Arch Re until all policyholder liabilities are settled.
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