United Arab Emirates Insurance Report Q1 2012
Includes 3 FREE quarterly updates
The UAE ranks as one of the larger and more dynamic of the insurance markets of the Middle East and North Africa. Over the long-term, there has been very steady growth in premiums – thanks in part to the growth and diversification of the economy, and in part to developments such as the 2008 introduction of compulsory health insurance for expatriates resident in the country. The UAE is also one of the most important markets for takaful (ie shari’a- compliant insurance), which has been expanding even faster than the overall insurance sector.
Relative to its peers in the region, the UAE’s insurance sector is also unusual in that there are two separate regulatory regimes. Offshore business is undertaken by companies that are established in the Dubai International Finance Centre (DIFC) and regulated by the Dubai Financial Services Authority (DFSA). Onshore business is regulated by the Insurance Authority. Although the two regulators signed a memorandum of understanding (MoU) at the end of April 2011, an organisation that is regulated by the DFSA does not automatically have the right to undertake onshore business in the rest of the UAE.
The latest figures, published by the UAE’s listed insurance companies in relation to H111 and the first three quarters of 2011, indicate that the sector as a whole is expanding at only single-digit rates. Growth would be minimal but for the explosive growth of family takaful contributions and motor contributions written by the Islamic Arab Insurance Co (Salama). Salama also stands out as one of the largest takaful operators globally.
The stagnation of gross written premiums is not a bad thing. Many of the insurance companies are responding to highly competitive conditions in an overly fragmented industry. Retention ratios have been rising – and quite sharply – relative to 2010: the companies have become a lot more choosy about the risks that they will underwrite and the price at which they shall do so. In short, net written premiums have been growing a lot faster than gross premiums. Interestingly, the vast majority of the local UAE companies appear to have been largely unaffected by the volatility in global financial markets through much of 2011. Nevertheless, we would not be surprised if there were a wave of consolidation in the UAE’s insurance sector in the coming years.
The UAE ranks as one of the larger and more dynamic of the insurance markets of the Middle East and North Africa. Over the long-term, there has been very steady growth in premiums – thanks in part to the growth and diversification of the economy, and in part to developments such as the 2008 introduction of compulsory health insurance for expatriates resident in the country. The UAE is also one of the most important markets for takaful (ie shari’a- compliant insurance), which has been expanding even faster than the overall insurance sector.
Relative to its peers in the region, the UAE’s insurance sector is also unusual in that there are two separate regulatory regimes. Offshore business is undertaken by companies that are established in the Dubai International Finance Centre (DIFC) and regulated by the Dubai Financial Services Authority (DFSA). Onshore business is regulated by the Insurance Authority. Although the two regulators signed a memorandum of understanding (MoU) at the end of April 2011, an organisation that is regulated by the DFSA does not automatically have the right to undertake onshore business in the rest of the UAE.
The latest figures, published by the UAE’s listed insurance companies in relation to H111 and the first three quarters of 2011, indicate that the sector as a whole is expanding at only single-digit rates. Growth would be minimal but for the explosive growth of family takaful contributions and motor contributions written by the Islamic Arab Insurance Co (Salama). Salama also stands out as one of the largest takaful operators globally.
The stagnation of gross written premiums is not a bad thing. Many of the insurance companies are responding to highly competitive conditions in an overly fragmented industry. Retention ratios have been rising – and quite sharply – relative to 2010: the companies have become a lot more choosy about the risks that they will underwrite and the price at which they shall do so. In short, net written premiums have been growing a lot faster than gross premiums. Interestingly, the vast majority of the local UAE companies appear to have been largely unaffected by the volatility in global financial markets through much of 2011. Nevertheless, we would not be surprised if there were a wave of consolidation in the UAE’s insurance sector in the coming years.
Contents
Executive SummaryTable: UAE Total Premiums, 2008-2016
Key Insights And Key Risks
SWOT Analysis
UAE Insurance Industry SWOT
UAE Political SWOT
UAE Economic SWOT
UAE Business Environment SWOT
Life Sector
Middle East Life Sector Overview
Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn)
UAE Life Sector Update
Table: Life Segment At A Glance, 2008-2009
Life Insurance Industry Forecast Scenario
Table: UAE Total Life Premiums, 2008-2016
Growth Drivers And Risk Management Projections: Population
Table: UAE Insurance Key Drivers, Demographics 2008-2016
Non-Life Sector
Middle East Non-Life Sector Overview
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn)
UAE Non-Life Sector Update
Table: Non-Life Premiums Breakdown, 2008 And 2009 (AEDmn)
Table: National Companies’ Non-Life Premiums Market Share, 2008 And 2009 (%)
Non-Life Insurance Industry Forecast Scenario
Table: UAE Total Non-Life Premiums, 2008-2016
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: UAE GDP By Expenditure, Current Prices Breakdown, 2008-2016
Political Stability Outlook
Table: Middle East And Africa Defence And Security Ratings
Healthcare
Health Insurance
Medical Tourism
Epidemiology
Table: Insurance Key Drivers, DALYs 2008-2016
Motor
Table: Insurance Key Drivers, Autos 2008-2015
Islamic Finance
Insurance Risk/Reward Ratings
Table: Middle East And Africa Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In The UAE’s Insurance Sector
Table: Ranking Of Companies By Premiums, 2009-2010
Regional Company Profiles
Allianz
Arab Insurance Group (ARIG)
Aviva
AXA
Chartis
Generali
HSBC Insurance
MAPFRE
MetLife ALICO
RSA
Zurich Financial Services
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Risk/Reward Indicators And Rationale
Table: Weighting Of Indicators Skip to top