Flagstone Re is boldly going where its rivals fear to tread.

And chairman Mark Byrne is hoping that increasing the young Bermuda company's global reach into countries where insurance penetration is low will help it to grow its business, even through the soft market cycle.

Last week, Flagstone bought a controlling interest in South African insurer Imperial Reinsurance. It also has operations in the United Arab Emirates, London, Puerto Rico, India and Halifax, Nova Scotia.

"We are looking at places where insurance penetration, as a percentage of GDP (gross domestic product), is low," Mr. Byrne said. "We believe that demand for reinsurance will be exploding in those places over the next 10 or 15 years.

"As a younger company, it is better for us to position ourselves for growth, rather than pushing as hard as some would be to gain market share in the existing market."

Mr. Byrne was speaking to The Royal Gazette at the World Insurance Forum in Dubai, where Flagstone opened an office last year.

Yesterday, Dubai International Financial Centre governor Dr. Omar Bin Sulaiman said that insurance penetration in the United Arab Emirates was just 1.7 percent of GDP, compared to a global average of 7.5 percent.

That figure is likely to rise in the booming region and during its first few months of operation, Flagstone's Dubai office has got off to a "flying start", Mr. Byrne said.

A post-Katrina start-up company that began operations in December 2005, Flagstone has chosen to spread its net wider than North America as it hunts for new business in growing economies.

The company employs 40 staff in Bermuda, out of a total global workforce of 250.

"I think we are turning over more stones than most people," Mr. Byrne said. "We are operating on five continents. It's a different type of approach that you don't see at many other companies."

He said the company stood to be more resistant to price falls in the soft market, because of its operations in areas with strong economic growth, which gave Flagstone a better overall chance of finding new business throughout the cycle.

Employing people who know the country and its customs as senior managers was another company strength, Mr. Byrne added.

"We want to have people who are regionally local as our CEOs, so in Dubai, we have a Jordanian, and in Puerto Rico, we have a team of Spanish speakers, for example," Mr. Byrne said.

As well as its office in Hyderabad, Flagstone is setting up a representative office in Mumbai, India's principal finance centre.

Last week, Flagstone acquired 65 percent of Imperial Reinsurance in a deal expected to close during the second quarter of this year.

Imperial, domiciled in South Africa, writes multiple lines of reinsurance in sub-Saharan Africa.

For more from the World Insurance Forum, including Axis Capital's CEO John Charman views on terrorism risk insurance underwriting and Lord Patten's speech on global matters turn to Page 26.