Bahrain-based Arab Insurance Group (Arig)launched its sharia-compliant Takaful Re re-insurance company on 19 September. Arig holds a 51.8 per cent stake in the new company, based in Dubai, with an authorised capital of $500 million and paid-up capital of $125 million. The other shareholders are Jeddah-based Islamic Development Bank, Dubai Investments, Emirates Industrial Bank, Emirates Funds,part of the Emirates Bank Group, Qatar Islamic Insurance Companyand Kuwait's Wethaq Takaful Insurance Company.
Arig will manage Takaful Re, which will start operations underwriting property and family business by the end of 2005. The new company is expected to hold a public share offering in the next two-three years. 'We are looking at niche areas and there are about 75 Islamic insurance companies but no sizeable re-insurance company. We saw a gap in the market,' Arig chief executive officer Udo Krueger said in Dubai on 19 September. 'There are two-three smaller re-takaful companies but they are not sufficiently capitalised to go global. We have first-mover advantage and do not have to establish new infrastructure to get started.' The re-takaful market was estimated to be worth $600 million in 2003 but has been witnessing double-digit annual growth. Arig has plans to expand regionally and has identified Saudi Arabia and Iran as key markets. There is growing interest in the Islamic insurance sector. In mid-September, UAE-based Islamic Arab Insurance Companyannounced plans to establish a re-takaful business in Saudi Arabia.
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