DIFC Hosts Corporate Risk Management ForumPress Release 06 Nov 2007 09:23 am
Dubai International Financial Centre (DIFC) today announced that it will be hosting a Corporate Risk Management Forum which will attract experts from the region to share their views on Corporate Risk Management. The conference will take place on Wednesday 7th November at the DIFC Conference Centre, with an impressive line-up of speakers from specialist companies including Qatar Gas, Oman Insurance and Heritage Group.
This is the first forum of its kind to be held by the DIFC and one of the key themes at this year’s event will be ‘Captive Insurance’. This is a sector which has previously seen low levels of awareness in the Middle East, but is now steadily gaining recognition as an alternative risk management and risk financing mechanism for corporate risks.
In line with its strategy as a leading international financial centre, the DIFC has set out to create a global hub to foster the development of a thriving regional captive insurance industry. It aims to align the region’s captive insurance sector with the global industry, which currently comprises approximately 5,000 captive insurance companies, with well over US$ 450 billion in assets, and writing more than US$60 billion in annual premiums.
George Oommen, Executive Director of Reinsurance at the DIFC commented: “The rise in oil prices has attracted high levels of investments to the GCC and this spike in investment opportunities has naturally led to a proliferating number of corporate risks. Regional corporations are now calling for more options when it comes to enterprise risk management and corporate risk financing mechanisms, and this is precisely why captive insurance has become such an appealing proposition.“
“With the maturing of the region’s financial services industry, captives are now poised to make a considerable entry into the region, and as such it is our responsibility, as the region’s leading financial centre, to increase understanding of this specialised area of insurance in the Middle East and to encourage its development, to bring it in line with the international market”, added George Oommen.
Captive insurance companies, or captives, differ from conventional insurers in that they have been established with the specific objective of financing risks originating from their parent company. This arrangement allows for a number of important benefits, not least of which is the fact that companies gain total control over a policy’s terms and conditions. This permits flexibility and consistency in the structuring of their insurance programmes, optimises premium stability, reduces insurance costs and provides access to the lower cost reinsurance market.
This, combined with the fact that captives are not always established to generate profits, creates a cost-effective alternative market, reducing the dependence of the group holding company upon the commercial insurance market, which can in turn result in a competitive advantage over industry peers.