Kane awarded first licence to establish captives in the QFC

Matthew Broomfield 03/09/2010

Kane has been authorised to set up an insurance manager in the Qatar Financial Centre (QFC). It is the first captive manager to be awarded a licence by the Qatar Financial Centre Regulatory Authority (QFCRA).

Kane LLC will be headed up by Shaun Brook (pictured right), practice leader of insurance management at Kane.

“Qatar has developed a renewed appetite for captives, so we were keen to be licensed there, knowing the environment is about to change for the better,” said Brook.

Kane’s confidence in Qatar as a domicile was greatly encouraged by the QFCRA’s release of a consultation paper earlier this year, which sought industry feedback on how to develop the QFC as a captive hub.

“Whilst they’re coming to the captive party rather late, there’s definitely a willingness from both the QFC and QFCRA to make Qatar the go-to place for captives,” said Brook.

Phillip Thorpe, chairman and CEO of the QFCRA, said Qatar’s insurance market was growing at a strong rate and increasingly contributing to the economy’s growth. “The regulatory authority is responding to this growth by establishing new regulatory structures to assist the further development of the insurance sector.”

The licensing of Kane in Qatar follows the company’s establishment of offices in Bahrain, in November 2008, and in the Dubai International Financial Centre in April 2009.

Brook said their desire to have multiple domiciles in the region stemmed from a need to provide choice to clients, which in turn will help retain their reputation for impartiality. “All companies have different priorities, so we must cater for that by offering real choice. It’s important therefore to function in the region as a multi-domicile captive manager,” he said.

According to Brook, there’s a relative lack of insurance penetration within Qatar, with large amounts of risk simply remaining on the balance sheet. However, he thinks this could potentially increase uptake in captives because they would seem more similar to companies’ existing arrangements.

“Those that don’t insure at the moment are likely to only accept a Sharia-compliant structure. Many companies, even if encouraged, wouldn’t feel comfortable with commercial insurance. A captive, however, might seem closer to their existing model and therefore more attractive,” said Brook.

Kane’s decision to set up in Qatar was also driven by client interest from outside the region. “There has been a lot of interest from companies with multi-captive strategies that are looking at the Middle East as somewhere to base a second or third captive, in order to break through into the East.“

The PCC model is already well understood in Qatar and could be utilised, however, Kane is proposing various structures, including producer-owned reinsurance companies, transformer cells and cat bonds through PCCs. “Ultimately it will be a question of the regulator’s appetite,” said Brook.

Tags: Kane Group, Middle East, QFC

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Kane awarded first licence to establish captives in the QFC

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