UAE: Reformatting of regulations
The UAE’s insurance market has been reporting positive growth over the past five years. This steady change facilitates long-term market awareness, and also creates a sustainable model built on a solid foundation. The Northern Emirates, in particular, are highly competitive in the region.
The Northern Emirates’ market is quite interesting because it is largely broker-driven and has a lot of elements which affect the overall region. The majority of the brokers in the Northern Emirates are from international jurisdictions and they work alongside local brokers who are more closely tied to the region. The international brokers are abiding by the same compliance standards as the offices in their home jurisdictions, which therefore tightens the overall regulatory compliance in the region.
The ambition of the local regulator to reformat the regulations in the UAE also contributes positively towards the strategic regulatory objectives because of the large number of companies coming from highly regulated jurisdictions. There is a huge amount of direct and alternative capital being injected into the market – a by-product of the large number of new companies moving into the area. The capital injection creates more expansion opportunities in the area, which brings more companies, which brings more capital. This cause-and-effect circle creates the type of growth we are seeing in the UAE. The growth cycle, coupled with the regulatory backgrounds and home office oversight of the companies moving into the UAE, all contribute to the insurance sector building momentum in the UAE and benefitting the region overall.
Opportunities in personal lines in the Northern Emirates continue to grow incrementally with more product innovation and market penetration. There are regulatory issues that apply to bancassurance everywhere, but this is particularly true in the UAE where there is high double-digit growth in the bancassurance area. In some instances, a whole new arena is being established using bancassurance.