Bermuda reinsurer Validus Holdings Ltd. is expanding its business into the Middle East.

The company announced yesterday that its subsidiary Talbot Holdings, Ltd., had teamed up with an Abu Dhabi insurer to create Underwriting Risk Services (Middle East) Ltd (URSME), a managing general agency based in Dubai.

The move comes as Validus is set to boost its capital base through a merger with fellow Bermuda reinsurer IPC Holdings Ltd. Shareholders of both companies will vote on the amalgamation on September 4.

URSME is a joint venture between Talbot Underwriting Ltd, which operates in the Lloyd's of London insurance market through Syndicate 1183, and the Abu Dhabi National Insurance Company (ADNIC), a leading provider of insurance in the region.

URSME has been granted a licence by the Dubai Financial Services Authority to operate in the Dubai International Financial Centre and management anticipates that the new office will open this month.

URSME will offer clients in the Gulf region facultative reinsurance products across a number of lines of business.

Samir Abdul Ahad, ADNIC Deputy CEO ¿ Underwriting and Claims, has been appointed chief executive officer for the newly established entity. He will work closely with the Talbot management team and David Morris, who will transfer from Talbot's London office to be the underwriter of URSME, to ensure the development of successful relationships with Middle Eastern businesses.

Nicholas Hales, managing director of Underwriting Risk Services, Ltd, commented: "We are delighted to be entering into this joint venture with ADNIC who are amongst the most highly respected insurers in the region. URSME will be able to offer substantial capacity across a number of business lines. We are excited by the prospects for this office which will enable the companies in the Validus Group to expand their products into a new regional marketplace."