United Arab Emirates Insurance Report Q1 2012

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.

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Executive Summary 5
Table: UAE Total Premiums, 2008-2016 5
Key Insights And Key Risks 5
SWOT Analysis 7
UAE Insurance Industry SWOT 7
UAE Political SWOT 8
UAE Economic SWOT 9
UAE Business Environment SWOT 10
Life Sector 11
Middle East Life Sector Overview 11
Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn) 11
UAE Life Sector Update 13
Table: Life Segment At A Glance, 2008-2009 13
Life Insurance Industry Forecast Scenario 14
Table: UAE Total Life Premiums, 2008-2016 14
Growth Drivers And Risk Management Projections: Population 15
Table: UAE Insurance Key Drivers, Demographics 2008-2016 15
Non-Life Sector 17
Middle East Non-Life Sector Overview 17
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn) 17
UAE Non-Life Sector Update 20
Table: Non-Life Premiums Breakdown, 2008 And 2009 (AEDmn) 20
Table: National Companies’ Non-Life Premiums Market Share, 2008 And 2009 (%) 20
Non-Life Insurance Industry Forecast Scenario 22
Table: UAE Total Non-Life Premiums, 2008-2016 22
Growth Drivers And Risk Management Projections 23
Macroeconomic Outlook 23
Table: UAE GDP By Expenditure, Current Prices Breakdown, 2008-2016 25
Political Stability Outlook 26
Table: Middle East And Africa Defence And Security Ratings 28
Healthcare 28
Health Insurance 30
Medical Tourism 32
Epidemiology 35
Table: Insurance Key Drivers, DALYs 2008-2016 36
Motor 37
Table: Insurance Key Drivers, Autos 2008-2015 39
Islamic Finance 39
Insurance Risk/Reward Ratings 40
Table: Middle East And Africa Insurance Risk/Reward Ratings 40
Competitive Landscape 41
Competitive Landscape Analysis 41
Major Players In The UAE’s Insurance Sector 41
UAE Insurance Report Q1 2012
© Business Monitor International Ltd Page 4
Table: Ranking Of Companies By Premiums, 2009-2010 42
Regional Company Profiles 45
Allianz 45
Arab Insurance Group (ARIG) 47
Aviva 49
AXA 50
Chartis 51
Generali 53
HSBC Insurance 54
MAPFRE 55
MetLife ALICO 57
RSA 59
Zurich Financial Services 61
BMI Methodology 63
Insurance Risk/Reward Ratings 64
Table: Insurance Risk/Reward Indicators And Rationale 65
Table: Weighting Of Indicators 66
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