The UAE’s insurance sector, one of the few bright spots in financial services amid a slowing economy, is expected to grow 15 per cent this year, says the Insurance Authority.
Insurance premiums were expected to rise to Dh38 billion this year from Dh33bn last year, Ebrahim Al Zaabi, the authority’s general director, said yesterday.
Speaking at a forum to discuss progress in bringing more of the authority’s services online, he said that “premiums are growing across the board”, but did not elaborate on the drivers of growth.
Mr Al Zaabi also said the authority would be increasing its oversight of the sector to ensure fair deals for consumers and reviewing all its rules.
Two years ago, the insurance industry introduced new regulations to protect consumers. Among other requirements, insurers’ paid-up capital was raised to Dh3 million from Dh1m.
Many insurers have joined the industry in recent years, making it difficult for some to stay afloat, especially those that made risky investments in the stock market.
Alpen Capital, a Dubai-based investment bank, said in a report published yesterday that the UAE was making strides in reforming the sector.
The report on the insurance sector in the Arabian Gulf said the Insurance Authority, which was established in 2010, was reforming the laws in line with international standards to restore profitability and address industry challenges.
“Under these new rules, the smaller companies in the industry are likely to struggle to change their present business model, without adversely impacting their profit margins,” it said. “Larger entities are accordingly expected to consider acquisitions as part of their business strategies over the next three years.”
Mr Al Zaabi also outlined the authority’s progress in rolling out its services online.
Of the authority ’s 47 services for companies and residents that can potentially be done digitally, 38 are now available on smartphones and mobile devices.
“The authority has succeeded in transferring most of its services that two years ago needed to be done manually into smart services via smart devices,” said Mr Al Zaabi.
The authority accepts complaints from individuals, but most of its services – such as renewal of permits or applications for permission to operate in the UAE – are for companies.
A PricewaterhouseCoopers report last year said that the insurance market in the Middle East had signiﬁcant growth potential, with an average insurance take-up of just 0.3 per cent in life insurance and 1.1 per cent in non-life insurance in 2012.
The report said life insurance was particularly underdeveloped in the UAE and Saudi Arabia, and predicted that the insurance sector would experience a wave of mergers and acquisitions.
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