Gulf Finance House to set up first captive insurance firm in Middle East

The proposed venture, which will be the first-of-its-kind in the Middle East, follows recent moves by the Bahrain Monetary Agency (BMA) to develop Bahrain as the regional center for captive insurance activities.

The commitment from GFH, which is spearheading the US$1 billion Bahrain Financial Harbour project, is the first to be received by the BMA on captive insurance, said Mr. Anwar Khalifa Al Sadah, Executive Director, Financial Institutions Supervision, at the BMA.

He was speaking at a joint press conference of the BMA and GFH, to announce plans for the new venture.

Mr. Esam Janahi, Chief Executive Officer of GFH, said he was very pleased that GFH was supporting BMA's initiative and taking a leading role to establish a captive insurance market in Bahrain.

The growth of GFH's investment activities has meant that GFH is now reviewing how it organizes insurance cover, he said.

"The Bahrain Financial Harbour is a very important infrastructure project for the future of Bahrain," said Mr Janahi.

It is to be built at Mina Manama and will house institutions operating in capital and retail banking markets and asset management as well as insurance, and will also provide residential accommodation and sophisticated leisure facilities.

As a financial city, the Bahrain Financial Harbour will attract both local and international captive insurers looking for state of the art accommodation and technology, he pointed out.

Mr. Al Sadah said that developing the captive insurance sector is a key element of BMA's new strategic policy to further advance the Kingdom's insurance industry.

Captives insure the risks of their parent's group and are a well-established tool used by many leading corporates as part of their overall risk management strategy.

"We are seeing a demand from corporates based in the GCC and the wider Middle East and South Asia region wishing to establish a captive insurer," said Mr. Al Sadah.

Currently, corporates based in the Middle East and South Asia have no local, reputable financial centre in which to base such an entity.

"We, at the BMA, have taken the initiative to develop the rules which would allow captive insurers to establish in Bahrain," said Mr. Al Sadah.

The rules, the first of their kind in the region, are scheduled for issuance next month.

The proposed rules are part of a BMA initiative aimed at developing and enhancing the regulatory framework for the insurance sector and position Bahrain as the leading regional centre for insurance business, said Mr. Al Sadah.

GFH's plan to establish the first captive insurer at the Bahrain Financial Harbour will help establish the captive insurance sector and should lead to the creation of new jobs in Bahrain, said Mr. Janahi.