ECO Reinsurance Company (ERC)

The idea of engagement in the reinsurance industry, as the organisation, was first adopted when Regional Cooperation for Development (RCD), was first set up in 1964 by Iran, Pakistan and Turkey. The reinsurance institutions of these countries came together and decided to establish Reinsurance Pools of various categories of non-life business resulting in …

The idea of engagement in the reinsurance industry, as the organisation, was first adopted when Regional Cooperation for Development (RCD), was first set up in 1964 by Iran, Pakistan and Turkey. The reinsurance institutions of these countries came together and decided to establish Reinsurance Pools of various categories of non-life business resulting in the following setup:

• Bimeh Markazi Iran, constituted the RCD “Accident and Engineering Reinsurance Pools” (in 1966 and 1968 respectively);
• Pakistan Insurance Corporation (PIC), constituted the RCD” Marine and Aviation Reinsurance Pools” (in 1966 and 1968 respectively);
• Milli Reasurans T.A.S (Milli Re) of Turkey constituted the RCD ‘Fire Reinsurance Pools” (in 1966).

The major target of these pools was to expand the volume of business transactions both within and outside the RCD region and the retention capacities of their members. In 1974, taking the need for rationalizing the administration of procedures, the Management Board of RCD Reinsurance Pools determined to merge them into a single Reinsurance Pool covering all categories of non-life business. The management of the newly integrated Pool was confided to Milli Re, which started its activities as of January 1, 1975.

On July 7, 1985, parallel to the reorganisation of RCD as ECO, the pool started to be known as ECO Reinsurance Pool. After operated successfully by Milli Re for twenty years, with the MOU dated March 15, 1995 and signed by the members of Council of Ministers of ECO, during the 3^rd ECO Summit Meeting at Islamabad, the headquarters of the ECO Reinsurance Pool moved to Karachi, Pakistan, effective as of January 01, 1996, to be managed by the Pakistan Insurance Corporation. The objectives of the Pool were to:

• Reinsurance on Fire, Marine, Accident and Engineering including any other class of business as may be decided;
• Foster closer cooperation among the insurance markets in the region;
• Promote exchange of reinsurance business among the members;
• Increase and improve the retention & underwriting capacity of the Region;
• Reduce the foreign exchange outflow from the region on account of reinsurance services

The ‘Articles of Agreement of ECO Reinsurance Company’ was signed by three Member States on 10 February 2010. After ratification by three founding members, the Articles came into force on 3^rd December 2017.

The authorized capital of the Company shall be thirty million US$, divided into three thousand shares with par value of ten thousand US$ each. The capital will be subscribed as under:

• 1,000 shares through the Bimeh Markazi Iran, in Iran;
• 1,000 shares through the Pakistan Reinsurance Company Limited, in Pakistan;
• 1,000 shares through the T.C Ziraat Bankasi, in Turkey.

The ERC would supplement the existing reinsurance services in the region, promote growth of the national underwriting and retention capacities, and minimize the outflow of foreign exchange from the region and to support economic development in the region. The company will serve as a regional centre for collection of insurance and reinsurance information and the development of expertise in the field of insurance and reinsurance.

It would also facilitate regional trade, increase commercial activities, improve contacts with international institutions and strengthen the insurance sectors particularly, through capacity building and technical assistance of the insurance organizations, ultimately leading to trade and economic growth of the region.
Virtual Consultative Meeting on ECO Reinsurance Company was hosted by the ECO Secretariat on February 6^th, 2023 in which it was decided that the Company will be operationalized after the 1^st General Assembly and next Board of Directors meetings.

The ERC will be set up by the Pakistan Reinsurance Company Limited (PRCL). You can visit the website of the PRCL at www.pakre.org.pk