Dubai International Financial Centre Authority Releases Comprehensive ’Guide To Re-Insurance And Captives In The DIFC’

The Dubai International Financial Centre Authority (DIFCA) today 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 DIFC 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 promose 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, pointed out that: “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.

For regional firms looking to finance and manage corporate risk, the DIFC’s legislative framework, coupled with its favourable tax environment, offers a convenient platform for the establishment of captive insurance companies. Further, the flexible yet robust onshore regulatory environment of the DFSA in their regulation of protected cell companies helps position the DIFC amongst the most competitive domiciles.

On the other hand, because of the vast potential, global majors are looking at the region, which has a huge programme of infrastructure spending on energy, construction, water, transportation & logistics, trade, tourism, and retail. There is a wave of privatization of state assets, resulting in previously uninsured risks that now require insurance cover. There is also the introduction of compulsory insurance covers and a generally increased insurance awareness.

The DIFC has set out to create a global hub to foster the development of a thriving regional captive insurance industry by attracting global insurers, reinsurers, brokers, insurance managers, actuaries, as well as educational and training providers by offering a unique gateway to regional market opportunities.

Dubai International Financial Centre announces the appointment of Abdulla Al Awar as Chief Executive Officer of DIFC Authority

Dubai International Financial Centre (DIFC) has announced the appointment of Abdulla Mohammed Al Awar as Chief Executive Officer of DIFC Authority, one of the main bodies of DIFC. Abdulla was previously Managing Director of DIFC Authority.Abdulla Al Awar succeeds outgoing CEO Nasser Alshaali who is leaving to pursue a career in the private sector, after a three year tenure at DIFC.Welcoming the appointment, His Excellency Dr Omar Bin Sulaiman, Governor of DIFC, said: "Abdulla has been an integral part of DIFC since its inception in 2004, and a key player in its growth and development as an internationally recognized centre. This new role recognizes Abdulla’s capabilities and commitment to DIFC.""As we enter a new phase of an even more integrated global economy, I am confident that Abdulla’s experience and knowledge will help him achieve new milestones, especially in service excellence, which will help steer DIFC closer towards achieving its vision of shaping tomorrow’s financial map as a global gateway for capital and investment", added Dr. Bin Sulaiman.Mr. Al Awar said: "I am honored to have been selected for this position at this critical juncture of our progress, and grateful for the vision and support shown by HH Sheikh Mohammed bin Rashid Al Maktoum, President of DIFC to future business leaders. I am excited about the challenges and opportunities of this role and look forward to supporting DIFC’s mission of creating sustainable growth in the region through a vibrant financial services cluster."David Eldon, Chairman of the Board, DIFC Authority stated, "I would like to congratulate and welcome Abdulla to his new position. We are confident in his capable leadership and ability to build and further improve DIFC’s position among the leading financial centres of the world." Wishing outgoing CEO Nasser Alshaali a successful future in the private sector, Dr. Omar commented, "We thank Nasser for playing a pivotal role in building DIFC into a globally recognized player. Today, DIFC has become the largest International Financial Services Industry cluster in the region between Singapore and Europe with more than 780 firms.Commenting on his departure Nasser Alshaali said: "During the past four years at DIFC, I have witnessed the region’s prominence in the global economy rise in a way unprecedented in modern history. With Dubai and the UAE’s financial industry in the lead, and supported by DIFC’s infrastructure, Abdulla will take this city within a city to new heights".In his recent role as Managing Director of DIFC Authority, Abdulla was responsible for overseeing the management of the body of DIFC, charged with developing overall strategy for the centre. His responsibilities included attracting financial institutions to operate in DIFC as well as the creation of an ideal platform for non-financial & professional service providers that support the constant development of the financial sector.

DIFC Knowledge Series Seminar Explores Bonds And Sukuks

The Dubai International Financial Centre (DIFC) today hosted a seminar to highlight the infrastructure and support it provides organisations seeking to attract investment through bonds and sukuks (Shari’a-compliant bonds).

Titled ‘Structuring and Issuing Bonds and Sukuks, the seminar was the fourth event that formed part of the DIFC Knowledge Series, a regular series of seminars organised by DIFC to raise awareness about its infrastructure, regulations and business support services. Senior officials from DIFC Authority, and the Dubai Financial Services Authority spoke at the event.

Abdulla Al Awar, Managing Director of DIFC Authority said: “Bonds and sukuks have become a vital financing tool for companies and governments in emerging markets. Well-functioning local bond and sukuk markets reduce exclusive reliance on bank loans. They also widen the set of financial instruments available for savers and investors and broaden investment opportunities. DIFC provides a platform for governments and companies to efficiently and competitively issue these securities. The financial district’s regulations, the pool of global expertise available within the DIFC community, and the access offered to an internationally linked market through Nasdaq Dubai provide the ideal support for companies and governments seeking to tap regional and international investors through bonds and sukuks.”

NASDAQ Dubai is the largest exchange in the world for sukuk listings by value with 20 sukuks worth $16.45 billion listed on the exchange. In 2008 alone, nine sukuks worth $6.33 billion were listed on the exchange. It also lists conventional bonds.

Martin Kinsky, Managing Director – Markets, DFSA said: “DIFC continues to be an excellent location for the issuance of debt instruments in the region. The DFSA is committed to monitoring world developments to ensure that its regulatory standards are effective and efficient to assist the growth of the financial services industry in DIFC.”

Amit Sahi, Senior Manager, Listings, NASDAQ Dubai, said: “As the region’s international exchange, NASDAQ Dubai is committed to providing an effective listing platform for fixed income issuance. We welcome issuers of conventional bonds and sukuks to our market.”

Topics that were addressed at the Knowledge Series event included regulations for bonds and sukuks in DIFC; listing requirements for sukuk in Nasdaq Dubai; Shari’a compliance for sukuks; preparing a sukuk issue; and legal requirements for a bond or sukuk issuance. Speakers at the event also presented an overview of the bonds and sukuk market in the region.

KKR Granted License To Operate From The Dubai International Financial Centre

Kohlberg Kravis Roberts & Co. L.P. (“KKR”), a leading global alternative asset manager, today announced that KKR MENA Limited has been granted a license by the Dubai Financial Services Authority to operate from the Dubai International Financial Centre (DIFC).

Abdulla Al Awar, Managing Director of the DIFC Authority, pointed out that: “The MENA region, and especially the Arabian Gulf, has been relatively less impacted by the ongoing global financial crisis than North America, Europe or Asia. The Gulf has been particularly well-cushioned by the windfall revenues from the high oil prices witnessed during most of 2008. This surplus income has been earmarked for continued investments in infrastructure projects to upgrade existing ones and build new capacities.

“Concurrently, our region is also witnessing a deepening of the financial markets and private equity is not only abundant here, but is fairly active. We are pleased to note that a globally respected firm such as KKR has chosen Dubai as their base to operate across the MENA region. We wish them the very best and offer all support for their continued success as we welcome them to the DIFC,” Al Awar said.

Led by Makram Azar, Managing Director and Head of Middle East and North Africa, KKR MENA is a newly formed subsidiary of KKR, especially created to do business from the DIFC. Its area of operations will cover the entire Middle East and North Africa (MENA) region. KKR MENA Limited will pursue private equity and infrastructure transactions in the MENA region and engage in the distribution of various KKR products.

Mr. Azar said: “We are delighted to officially launch KKR’s office in the DIFC and our operations in the rapidly developing Middle East and North Africa region. There are a wide variety of attractive opportunities in these markets and our professionals here look forward to capitalizing on KKR’s global resources to build an exceptional franchise.”

Robert Half opens first Middle East office in the Dubai International Financial Centre

Robert Half International (RHI), a global leader in professional staffing and consulting services, has opened its first Middle East office in the Dubai International Financial Centre (DIFC).The new office will house three divisions of RHI – Robert Half Finance and Accounting, dedicated to the hiring of finance and accounting professionals; Robert Half Financial Services Group for banking professionals; and Robert Half Technology for information technology specialists.Abdulla Al Awar, Managing Director of the DIFC Authority said: "Identifying and attracting people with the right skills is key to business growth at any time, but in the current economic environment, it is particularly critical. With its vast global expertise, Robert Half will enrich and add considerable value to the pool of professional staffing and consulting resources available within the DIFC community. We look forward to providing Robert Half with the services and support they need to establish and grow their business in the region."Ian Graves, Robert Half’s Managing Director for Europe, Middle East and Africa said: "We see a lot of potential for our services, both in the UAE, specifically, and in the Middle East overall, as the market is still relatively young here. With our office in Dubai, we will be able to deliver experienced finance and accounting professionals to companies who are expanding or entering this important new market. The hiring market might be challenging due to the economy, but employers in the region still report a steady need for staff members with a proven track record."According to a Robert Half survey, conducted in March, 2009 among finance and accounting hiring managers in the UAE, 91% of respondents indicated they plan to maintain current staffing levels in their Finance and Accounting departments or to expand their team. Companies planning to hire indicated a need to do so largely in response to business growth, according to respondents."With more than 60 years of international experience, an international network and a reputation for thoroughly understanding the needs of both job seekers and companies, Robert Half is a highly respected recruitment resource, in any economic environment," added Graves.The new team in Dubai is being led by James Sayer, Senior Manager. Sayer has a significant track record in the recruitment market in the United Kingdom, Germany and, for the last four years, in the Middle East. He leads an experienced team with many years of targeted recruiting experience, specifically dedicated to their specialised areas.

DIFC’s Third Knowledge Series Seminar Tells Of New Retail Financial Services Available In DIFC

The Dubai International Financial Centre (DIFC) hosted a seminar today that focused on retail financial services, and discussed how recently-effected regulatory amendments now allows financial institutions within DIFC to offer services to retail clients.Titled ‘Retail Financial Services in DIFC’, the event is the third in the Knowledge Series, a regular programme of seminars organised by DIFC to raise awareness about its regulations, infrastructure and business support services. Speakers at the event included officials from DIFC Authority, Dubai Financial Services Authority (DFSA) and leading financial institutions and legal firms in DIFC.Abdulla Al Awar, Managing Director of DIFC Authority said: “The growing maturity of DIFC as a financial centre and increased convergence across financial markets led to amendment of regulations to allow institutions based in DIFC to serve retail clients. DIFC seeks to constantly evolve and update its regulatory and legal framework in accordance with industry trends.”Speaking at the event, Paul Koster, CEO of the DFSA, said: “The DFSA’s introduction of a retail model is a demonstration of our commitment to create an environment that allows firms in the DIFC to continue to develop, while still meeting appropriate international standards.” He emphasised that firms in the DIFC "can expect the DFSA to continue to be proportionate in our actions and transparent in our processes.”Topics that were addressed at the Knowledge Series event included Local and International Regulatory Developments; Data Protection; Wealth Management; and Retail BankingPeter Hodgins, Partner, Clyde & Co LLP added: "The retail insurance industry in the GCC continues to experience significant growth. Market penetration is increasing as customer awareness of both conventional insurance and Islamic insurance (Takaful) products develops. In our experience at Clyde & Co, the DIFC offers insurers an excellent platform from which to manage and develop their retail insurance operations in the region. The continued development of the DIFC’s legal and regulatory framework and the broader infrastructure will only encourage clients in this exciting sector of the retail financial services industry."Paul G. Killik, Senior Partner of Killik & Co LLP said: "The sophisticated structure and detailed thought given to the DIFC together with the Retail Endorsement recently granted by the DFSA allows Killik & Co to remain true to its roots of helping the retail saver. We are very impressed with the approach to regulation".Regulatory amendments made in July 2008 to the DFSA’s Rulebook made it possible for banks and financial service companies based in the DIFC to provide financial services to retail clients. Initially, the DIFC was established as a solely wholesale financial services environment in which registered firms were not allowed to deal with retail clients. The recent regulatory amendments allow duly endorsed financial institutions to expand their operations to a broader retail client base.
 

Heritage Continues Middle East Expansion With Opening Of Office In Dubai

Heritage, a leading independent global provider of captive management and insurance services, today announced that it has received a license from the Dubai Financial Services Authority (DFSA) to establish an insurance management company in the Dubai International Financial Centre (DIFC).
The new DIFC based company, Heritage Insurance Management (Dubai) Ltd (HIMD), is the first independent captive manager to set up in Dubai. The company will provide an extensive range of risk management and insurance solutions to both public and private sector enterprises in the UAE and the wider Middle Eastern region.

The announcement follows the establishment of Heritage Insurance Management (Bahrain) W.L.L. (HIMB) in Manama, Bahrain in November 2008.

Abdulla Al Awar, Managing Director of the DIFC Authority, said: “We are very happy to welcome Heritage to the growing community of financial service companies in DIFC. The establishment of the Heritage office is testament to the growing interest of global companies in offering captive management services in the region. DIFC’s world-class regulations, infrastructure and business services make it a productive domicile for captive insurance. We have developed specific legislation that enables the creation of a variety of captive insurance vehicles including protected cell companies.”

Stephen May, Chief Executive Officer, Heritage London and Middle East, said: “The opening of the Dubai office is another major step in our growth plans for the Middle East. The launch of HIMB and today’s announcement clearly demonstrate our commitment to establishing Heritage as the pre-eminent risk and insurance management specialist in the region, and makes us the first insurance manager to be located in more than one Middle Eastern domicile.

There is tremendous potential for self retention vehicles such as captives in the Middle East, and this is bolstered by the proactive approach of regulators such as the DFSA. Furthermore, the financial uncertainty created by the global economic crisis has emphasized the value of these vehicles in empowering companies to take greater overall risk control. As this potential grows, so Heritage will continue to expand its operations as we maintain our position as the best resourced captive manager in the Middle East.”

Keith Carten has been appointed Senior Executive Officer of HIMD. Technical and Underwriting Specialist at Heritage London, Mr Carten brings over 30 years of experience in the financial services sector to the role.

Mr. Carten said: “Our aim is to work in partnership with enterprises in the UAE and the wider Middle Eastern region to help them better identify and manage their risk profiles by providing our expertise in captive management and risk transfer techniques. Only through partnering with our clients can we establish long-term sustainable relationships founded upon trust and understanding. Our partnership-based approach will also extend to our work with local insurance brokers as we combine our efforts to meet the growing demand for self retention vehicles in the region.”

Dean Wickens, whose appointment with Heritage London & Middle East was announced in January, will be Captive Manager for the HIMD operation. Former Deputy Head of Insurance at the Cayman Islands Monetary Authority, Mr. Wickens’ 15 years of insurance experience includes seven years supervising captive insurance companies.