The UAE Insurance Authority is working on regulations to streamline the sector even as written premiums rose 13.5 per cent annually to Dh33.5 billion last year.
“The Insurance Authority is still in the process of completing the legislations,” said Sultan Al Mansouri, the Minister of Economy and chairman of the authority, in a report.
The authority has issued rules to organise the operations of insurance agents and professionals associated with the sector, while consultants have completed the preparation for the financial regulations. “These regulations, when issued, will play a positive role in the stability of the insurance market,” Mr Al Mansouri said.
These include a study on a new system for actuaries and amendment of the 2007 law about the establishment of the Insurance Authority and organising its activities.
In February, the authority had introduced new rules placing restrictions on how companies could invest their money and how much exposure they could have in a particular asset class.
The rules also require them to have an independent investment committee as well as a series of changes that strengthen corporate governance, compliance and risk management.
The investments of insurance companies totalled Dh39.2bn last year, out of which 63.4 per cent was in shares and bonds and 22.8 per cent in deposits, the report states. Total equity of the national insurance companies amounted to Dh19.8bn. “The development of economic, construction and social activities in the state had a positive impact on the insurance sector,” states the report.
Total underwritten premiums for life assurance reached Dh8.6bn last year, with national companies accounting for 18.6 per cent of the share and 81.4 per cent for foreign companies.
Total underwritten premiums for property and liability insurance was Dh24.9bn, with the share of the national companies at 75.1 per cent and that of the foreign companies at 24.9 per cent.
Of the 60 firms involved, 34 were national insurance companies and 26 foreign firms. Of the 34 national firms, 11 were Sharia-compliant Takaful companies.
Last year was the worst on record for UAE insurers in terms of underwriting performance, because of “the fiercely competitive market for high-volume medical and motor lines”, the rating agency Standard & Poor’s said in May.
Oman Insurance Company, for example, reported lower profit for the first quarter of the year, with rising premium income undercut by fierce competition across the sector.
For the Dubai-listed insurer profit attributable to owners of the company for the first three months of the year fell 25 per cent year-on-year to Dh44.5 million.
dalsaadi@thenational.ae
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