Announce Joint Venture to Establish Specialist Reinsurer in the Gulf
HAMILTON, Bermuda--(BUSINESS WIRE)--March 17, 2008
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
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.
Arch Capital Group Ltd.
Marc Grandisson, +1-441-278-9200
Chairman and CEO, Arch Worldwide Reinsurance Group
Gulf Investment Corporation
Gail Norstrom, +9714-401-9562
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