From: Captive International

From the UAE to Saudi Arabia, interest in using captives to write a variety of risks—including property, casualty, and financial and professional lines—is increasing across the Persian Gulf, says Marsh’s Ronny Vellekoop.

Frustrated by growing challenges in the global commercial insurance market—where prices are increasing and available coverage terms are being restricted—companies based in the Middle East are increasingly recognising the potential value of captives. And their interest is coinciding with regulatory efforts aimed at making sure that these companies’ captives stay in the region.

A friendlier regulatory framework

Although individual organisations are moving at varying paces—with some having completed captive feasibility studies and others just beginning such efforts—regulators are doing their part to facilitate captive insurance growth in the region. The United Arab Emirates (UAE), for example, is taking steps that could eventually make it a rival to more established domiciles.

Since the early to mid-2000s, the Dubai International Financial Centre (DIFC) has been a regional financial hub that has attracted institutions from around the world. In part, that’s due to its status as a special economic zone within the Emirate of Dubai that offers low corporate taxes and a legal system based on English common law.