The effect on the Gulf region was dramatic in that the funds for development were now available, and there were also significant implications beyond the borders of the region. The oil-producing countries with cash to spend turned to the West and provided opportunities for international construction companies of diverse disciplines, suppliers of technology and specialised services to enter the oil producers’ markets. This initial burst of infrastructural development provided new opportunities for the local insurance industries throughout the region, resulting in a spurt of premium growth.


Throughout the Gulf, road networks were soon snaking through the


deserts and tower cranes began to sprout from the sand as hotels, offices, schools and factories were built. The influx of people resulted in soaring residential rentals and the need to construct housing for the growing expatriate population. All of this provided opportunities for the local insurance industry to grow and hone its skills.


The whole economy took on a vibrancy that, despite various dips,


very much remains to this day. Certainly there were times when the headlong development process stalled, but the overall economics have been in one direction: upwards.


It was during this period of sustained development that the regional


insurance industry recognised its greatest growth potential and began to expand, develop skills, and increase its capacity and capital base to meet the new demands of the growing economies. A number of very large industries emerged. These were, in the main, oil and gas-related in the upstream and downstream areas. Development of downstream industries such as refining, fertilisers, and petrochemicals provided a growing base of insurable assets and contingent growth for the insurance industry.


Power and water generation was, and continues to be, an area undergoing


considerable growth. The relatively recent creation of world-class Gulf- owned and based airlines has added to the continuing opportunities for the burgeoning insurance industry. There were, of course, local airlines 30 or so years ago, but it is the newer entrants such as Qatar Airways and Emirates that have grabbed headlines around the world.


Gulf captives During all this growth, as new industrial complexes and glitzy cities


sprang up, the captive insurance industry was virtually ignored. The captive names that entered conversation were those of the oil majors who had entered the region to assist the local oil and gas companies to develop their upstream and downstream industries. These were joint venture and production-sharing agreements, and the foreign partners were there to introduce their captives into the


equation to insure and reinsure major construction projects and the resulting operational insurance programmes.


Is there a place today in the region for captive insurers? Very much


so, I would argue, and indeed one has already been established, named Al Koot. It is the captive insurance company of the state oil company Qatar Petroleum.


In recent years we have seen the development of both the Dubai International Financial Centre (DIFC) and the Qatar Financial Centre (QFC), both of which have had considerable measures of success. QFC has attracted a number of insurers and reinsurers since its formation in 2005. Indeed, it has within its stable Kane, the captive management company, which obviously sees great potential for growth in the region.


The region is now ripe for the establishment of captives. They may,


of course, be domiciled and managed in the more traditional centres, but what could be better than a vibrant economy with a long-term industrial—predominantly hydrocarbon-based—complex in which companies may both establish and manage their captives?


Qatar provides a world-class destination for captive re/insurance, offering excellent communications, an open-door policy and an offshore tax environment, together with a first class regulatory regime which is focused on just that—regulation—rather than being distracted by developing a parallel property and retail environment.


Ian Sangster is acting chief executive officer at Q-Re. He can be contacted at: isangster@q-re.com.qa


“QATAR PROVIDES A WORLD- CLASS DESTINATION FOR CAPTIVE RE/INSURANCE, OFFERING EXCELLENT COMMUNICATIONS, AN OPEN-DOOR POLICY AND AN OFFSHORE TAX ENVIRONMENT.”


48 emea captive 2012


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