New Financial Services market report from Business Monitor International: "United Arab Emirates Insurance Report Q1 2013"
Boston, MA -- (SBWIRE) -- 03/07/2013 -- Key Insights And Key Risk
This UAE Insurance Report considers the prospects for both life and non-life insurers in the country. As of late 2012, data confirm our view that the UAE is one of the largest and most dynamic of the insurance markets of the Middle East and North Africa (MENA) region. The published accounts of the larger listed insurance companies in relation to 2011 indicate that both segments grew at (low) double-digit rates in terms of gross written premiums. However, premium growth appears to have slowed in H112. The latest data from Salama, the multinational takaful operator based in the UAE, suggest takaful will not contribute to the overall growth of the sector in 2012.
Importantly, much of the newsflow through H112 indicated that the UAE's insurers are responding proactively to the competitive and often difficult conditions, particularly in the non-life segment. During 2011 and H112, several insurers allowed premiums and profits to contract as they focused on writing business that would contribute to profitability over the medium-to-long term. Various partnerships have been announced to exploit areas of opportunity, such as health insurance. Retention rates have risen. New products have been developed.
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HDFC Life, the largest private sector life company in India, has established an operation in Dubai that focuses, not unreasonably, on wealthier non-resident Indians (NRIs). The majority of companies in the UAE's insurance sector were largely unaffected by the volatility of global financial markets through 2011.
We remain of the view that some kind of consolidation will take place in the competitive landscape. The largest UAE insurers - such as Salama, Oman Insurance Company and Abu Dhabi National Insurance Company (ADNIC) write annual premiums of around US$600-800mn. By this metric, they are roughly half the size of Tawuniya, the largest insurance company in Saudi Arabia and would rank as no more than medium-sized players in most other countries outside the MENA region. Many of their competitors in the UAE are much smaller.
Over the last quarter, BMI has made the following changes to this industry report:
- The analysis incorporates BMI's latest forecasts for the UAE's economy, including details in relation to auto sales and trends in the healthcare sector.
- The analysis takes into account company comments in relation to H112 and Q113.
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