Arab Insurance Group (Arig), a Bahrain-domiciled treaty and facultative reinsurance provider, is to cease writing reinsurance business and could look for a buyer to take over the firm while it’s in run-off.
After two downgrades from ratings agencies over a nine month period, the Central Bank of Bahrain uncovered “glaring deficiencies” in the Arig’s governance framework.
The company has suffered losses across its business in recent years, with reinsurance operations struggling to remain profitable as the firm’s Lloyd’s of London business faltered from the offset.
Following a strategic review and the Central Bank of Bahrain’s inspection report, the extraordinary general meeting of Arig was held on August 13th, 2020.
During the meeting, the company was approved to cease writing further reinsurance business; authorised the Board to carry out an orderly run-off of the existing portfolio internally or by appointing a third party to carry out the run-off including sale of portfolio; while the company is in run-off, explore the possibility of finding a buyer to take over the company; and, authorise the Board to take all actions required to preserve and enhance Shareholder value.
According to analysis, Arig’s past performance over a twenty-one year period ending 31 Dec 2019, showed that Shareholders of the company had lost a total sum of $156 million.
