A seminar organised by the Dubai International Financial Centre (DIFC) today highlighted DIFC’s tremendous potential in developing into a key global and regional hub for captive insurance.
Part of the ‘DIFC Knowledge Series’ seminars, the event focused on the benefits of captive insurance as a risk-management tool and the growth opportunities emerging in the region for global providers of captive insurance solutions.
Senior DIFC officials joined captive-insurance industry leaders and legal experts to discuss key issues that included: the optimal role of captive insurance solutions in an organisation’s risk management strategy; the corporate motivations behind the implementation of captive insurance solutions; legal considerations of captives in DIFC; the long-term benefits provided through the adoption of a captive structure; and the opportunities offered by captives in the current economic climate.
Abdulla Al Awar, Managing Director of DIFC Authority said: “As DIFC expands further as a global financial centre, captive insurance is one of the niche segments that have been identified as focus areas. Over recent years, many companies have investigated the addition of alternative risk solutions to enhance their insurance programme. In support of this, DIFC is positioning itself as the domicile of choice for advice, consultation and implementation of captive solutions in the region..”
Marsh, the world's leading insurance broker and strategic risk advisor announced the establishment of an office in DIFC to provide captive management services to the region in July 2008. Heritage, Europe's leading independent captive insurance manager, which is in the process of establishing a captive management office in DIFC, is expected to be licensed in the first quarter of 2009. Many other global firms have showed a strong interest in establishing offices that offer captive management services.
“With the rapid development of the region’s economy and the financial industry, whose outlook is very strong, despite the global financial crisis, the growth potential for captive insurance is highly promising,” Al Awar said. “With insurance rates rising, large regional firms are looking at various alternate options for financing risk. Captive insurance provides an effective strategic tool for these firms,” he added.
Outlining DIFC’s potential in becoming a captive insurance hub, Al Awar said: “DIFC provides an outstanding infrastructure and regulatory environment and the critical support necessary for leading global companies to operate regional captive insurance units. DIFC also offers a whole host of incentives for captive insurance companies. By locating within DIFC, captive insurance companies have easy access to the ancillary service providers necessary for them to operate efficiently. Furthermore, the geographic location of DIFC makes the administration and management of captive insurance companies easier, both because of time zone and easy accessibility.”
Other speakers at the Captive Insurance seminar came from Marsh; Heritage; Clyde & Co; and Simmons & Simmons.
