Arab Insurance Group (Arig) has announced plans to establish two new subsidiaries before the end of 1998. One of the new companies will take over the group's reinsurance activities, while the second will offer life insurance.

Arig Reinsurance Company (Arig Re) will have a paid-in capital of $300 million and is expected to be established soon. Assistant general manager for reinsurance at Arig, Abdul-Latif Sharif, was quoted by Reuters as saying: 'We have received initial approval from the Bahraini authorities and it is expected to be set up soon...possibly later this month.'

Sharif said Arig Re was part of a strategy to separate the group's reinsurance activities from other investment and insurance activities. 'The formation of Arig Re is aimed at improving the focus on the reinsurance business and will help the group to achieve its reinsurance objectives in the Arab world,' he said. 'The objective is to increase Arig's market share in the Arab world and emerging markets and improve its rank and competitive position among global reinsurance companies.'

Details of the planned life insurance subsidiary have yet to be announced. It will form part of a diversification programme which has seen the group acquire investments in Bahrain, Egypt, Jordan, Lebanon and Morocco.

A spokesman for the group told MEED it would consider further expansion 'wherever there are opportunities, but mainly in the Arab world'. In late 1996, it established a health insurance subsidiary in Bahrain.

Arig was established in 1980 by the governments of Kuwait and Abu Dhabi and the central bank of Libya. It was converted into a public shareholding company in 1997 and its shares are listed on the stock markets of Bahrain, Oman, Kuwait and Egypt. Its global depositary receipts are listed on the London Stock Exchange.