Economies cannot grow without the support of insurers; insurers acting as a risk carrier, thus reducing the overall risk to investors. Given the market dynamics, the insurance industry is witnessing a steady growth in conjunction with product diversification and innovation. Covering risks needs economic capital to cope with claims volatility, and as such insurers have to rely on reinsurers to increase their solvency margin while “equalizing” their results. Relying on their long track record, their high capacity and proven expertise, top international reinsurers are leading the majority of the markets; regional and national reinsurers striving to increase their shares within their regions while offering proximity services and knowledge.
Several financial institutions and companies from both the private and the government sectors in the Arab countries have enforced the recommendation of the 5th General Arab Insurance Federation (GAIF) conference held in Kuwait in 1969, that is, the establishment of an Arab reinsurance company. The objective was to have a regional reinsurer supporting mainly Arab insurance companies, with an opening to non-Arab markets to ensure a steady growth. Many Arab countries have tried to host the company’s headquarter by granting financial and legal facilities, as well as tax exemptions. On 11/3/1972, Arab Reinsurance Company (S.A.L.) (Inter-Arab Company) was established in Beirut, with a capital amounting to two million Sterling Pounds; being the first of its kind in Lebanon.
Three years after its establishment, Arab Re witnessed the Lebanese civil war which started in 1975. The impact on the economy was a disaster, with many institutions and companies pushed to transfer their activities abroad. Nevertheless, Arab Re maintained its head office in Lebanon with an absolute support from its employees, Board of Directors, and shareholders. We have to say that the entire Arab Re team has clearly demonstrated an unconditional faith in this pan-Arab project, and vowed loyalty to its host country. Though times were extremely difficult during the Lebanese war, Arab Re never stopped supporting its clients, never defaulted on paying its dues, and was always among the first companies (if not the first) to pay its claims and honor its contractual agreement, thus gaining the recognition of all of its clients. Putting the bad time of war behind, Arab Re looked into the future with great hope in order to fulfill its mission and achieve its long term target. Arab Re had to consolidate its base on solid ground before succeeding in catching-up its peers in the Arab insurance markets while focusing on: business development, expansion of business base through acquisition of more clients, sound technical results, capital increase, building-up of reserves, and reputation.
Arab Reinsurance Company is now very much well known for its reliability, and is very much appreciated by the insurance industry. We will now be leveraging on our market position and relations to gear-up and go beyond the traditional reinsurance mission.