Dubai: Dubai Group, the leading diversified financial services company of government-owned Dubai Holding, is planning to launch an insurance company in December, its chief executive officer said yesterday.
"It will be completely owned by the Dubai Group ... it will be a conventional [insurance company]," Thomas S. Volpe said on the sidelines of the closing of a $1.5 billion multi-currency syndicated commodity murabaha transaction.
"If you look at the insurance business in this part of the world compared to any other developed region, the penetration of it is tiny. So there is a huge opportunity to not only have individuals who buy more insurance but more people who don't have insurance to buy. Then you got the huge increase in population...so there is a big opportunity."
The insurance company will be based in Dubai, and is gradually expected to spread out to the Gulf but it can also go beyond the region, including in the Middle East and North Africa, India, and Kazakh-stan.
The murabaha facility of $1.5 billion will be used to explore new growth opportunities, support current investments and refinance existing debt, according to a statement released to the press.
A total of 24 banks from across the Middle East, Europe and Asia participated in the transaction, the profit rate of which was 200 basis points per annum over the applicable benchmark with a three-year maturity period.
Specifically on exploring investment opportunities, the chief executive said: "We want to go places where we have an advantage. We don't want to go places where we are just selling money...a place where there is a reason of why they want Dubai involved other than money."
"And there are a lot of places that want to do that and they tend to be in the emerging markets. They tend not to be in the UK and North America."
Dubai Group's investments are predominantly in the Middle East and North Africa (Mena) region, India and Asia as well, he said, adding, India is a "priority" for the group and it is opening an office in Mumbai soon.