Arch Capital Group Ltd. (NASDAQ: ACGL) and Gulf Investment Corporation (“GIC") announced today that they have entered into a joint venture agreement to establish Gulf Re, a new specialist reinsurer to be based in the Dubai International Financial Centre.
Arch Capital and GIC will subscribe to a total of $400 million of capital. The initial paid up capital of Gulf Re will consist of $200 million, with an additional $200 million to be funded depending on the business needs of the company. Gulf Re will be owned by Arch Capital and GIC equally.
Gulf Re will initially target high-value oil and gas, industrial, utility and transportation assets primarily in the six member states of the Gulf Cooperation Council ("GCC") which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. The company will write a broad range of property and casualty lines of reinsurance, including aviation, energy, commercial transportation, marine, engineered risks and property, on both a treaty and facultative basis.
Gulf Re underwriting activities are expected to commence during the first half of 2008, subject to receipt of the necessary regulatory approvals from the Dubai Financial Services Authority.
"The GCC is home to a large and fast growing, state-of-the-art tangible asset base, built and operated to the highest standards," said Mr. Dinos Iordanou, the Arch Capital Group President and CEO. "The joint venture will allow Arch to expand its platform in a region where there is a strong need for local reinsurance capacity and specialist expertise for these assets. Arch has extensive experience in the lines of business that will be focused on by Gulf Re," he added. "By partnering with GIC, a successful and highly regarded sponsor in the GCC, Gulf Re will be well-positioned for opportunities in the marketplace. Gulf Re will also benefit from an outstanding management team," said Mr. Iordanou.
"Gulf Re will meet the need for a Gulf based reinsurer with significant financial resources and specialist expertise," said Hisham Al-Razzuqi, the GIC CEO. "The company will add depth to the GCC insurance sector and support the growth of GCC insurers. Gulf Re will benefit from the technical expertise and support of Arch Capital, widely recognized for the quality of its management. The resources of both joint venture partners will provide strong support to Gulf Re as it builds its reinsurance business," he added. "This is a strategic long term investment for GIC, in line with our mission to develop financial services in the GCC," Mr. Al-Razzuqi said.
Gulf Re will be led by Gail Norstrom, who has over 36 years of insurance industry experience. Mr. Norstrom was previously a Managing Director of Aon Risk Services Property Practice Group. Prior to joining Aon, he served Industrial Risk Insurers in various senior executive capacities, including President and CEO. Gulf Re core management team includes four additional senior executives with many years of experience in Europe and the United States with leading European and U.S. insurance firms.
Arch Capital Group Ltd., a Bermuda-based company with approximately $4.34 billion in capital at December 31, 2007, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.
GIC is a pre-eminent financial institution established in November 1983 and equally owned by the six member states of the GCC. Its mission is to promote private enterprise and help develop capital markets in the GCC. GIC is registered in Kuwait and regulated by the Central Bank of Kuwait, with the legal status of a Gulf Shareholding Company. Its main activities include investment management, financial advisory and principal investments. GIC has substantial investments in power and water desalination, petrochemicals, steel, telecoms, financial services and other industries. GIC had shareholders’ funds of about $2 billion as at end 2007. GIC is rated (A-) by S&P, (A) by Fitch and (A2) by Moody's.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries (collectively, the "Company') may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. Forward-looking statements reflect the Company's current assessment of risks and uncertainties, which may cause actual events and results and prospects to differ materially from those expressed or implied in these statements. Certain information regarding such risks and uncertainties is set forth in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.
Contacts:
Marc Grandisson, +1-441-278-9200
Chairman
and CEO, Arch Worldwide Reinsurance Group
mgrandisson@archcapgroup.bm
or
Gulf
Investment Corporation
Shafic Ali
Director
Principal
Investments
Mobile: +965-788-3134
Fax: +222-5180
sali@gic.com.kw
or
Gulf
Re
Gail Norstrom, +9714-401-9562
CEO
Mobile:
+97150-708-5609
gail.norstrom@gulfre.com
