Dubai has shown it can compete with Bermuda in terms of getting a new reinsurance company up and running in a short time.

Gulf Re, a joint venture between Bermuda-based Arch Capital and the Gulf Investment Corporation (GIC), expects to write its first business "within days" after receiving its licence from the Dubai Financial Services Authority (DFSA) last week.

"The DFSA worked closely with Gulf Re management to achieve this milestone in about two months," said Gulf Re chief executive officer Gail Norstrom. "We look forward to writing our first reinsurance business in a matter of days." One of the major attractions of Bermuda to the owners of new insurance companies is that financial regulator the Bermuda Monetary Authority strives to deal directly with the necessary due diligence in order to license the company to operate within weeks rather than the months it would likely take in New York, for example.

This allows new players to take advantage of market opportunities created by a sudden hardening of rates following a major hurricane or other high severity event.

Dubai is relatively new to the insurance business, but the Dubai International Financial Centre has made clear its aim to make itself a regional hub for both the captive and reinsurance industries. Gulf Re is a new specialist reinsurer equally owned by GIC and Arch. GIC and Arch Capital have each subscribed to a total of $400 million of capital. The initial paid-up capital of Gulf Re is $200 million, with an additional $200 million to be funded depending on the business needs of the company.

Gulf Re will initially target high-value oil and gas, industrial, utility and transportation assets primarily in the six member states of the GCC. The company will write a broad range of property and casualty lines of reinsurance, including aviation, energy, commercial transportation, marine, engineered risks and property, on both a treaty and facultative basis.