Allianz Global Corporate & Specialty (AGCS) has confirmed that it plans to close its office in Dubai, subject to regulatory approvals. There will be no new business after 30 April 2020. However the office will remain open until the end of the year. This decision comes after a strategic review of the office and its future potential, said the company in a statement.
Since 2010, AGCS has been operating under a reinsurance licence in Dubai through a branch of its subsidiary Allianz Risk Transfer AG, mostly focusing on engineering, property, liability and financial lines. After review, the company has decided there was not the potential to scale the Dubai office’s activities to achieve long-term profitable growth given a high cost base and stagnant premium growth over the past few years. The high cost base was mostly attributed to office rental, HR costs and broker commissions.
AGCS will continue to support both local and global clients with business interests in the MENA region writing business from its underwriting hubs in international insurance markets such as London or Asia. AGCS will cooperate with existing network partners in order to provide local policies for global programmes for multinational companies.
The ongoing management of claims and handling of the run-off portfolio will be managed by ART AG.
The Dubai office generated around EUR30m in GWP on average over the last few years. The company said it is confident that it can maintain a significant share of these premium income underwriting MENA risks in international insurance markets.
Twenty-three employees based in the Dubai office will be impacted by the closure and the company said it will ensure that these employees will be properly supported throughout this process.