Abu Dhabi, November 28, 2013
The significance of the insurance sector in the UAE is emphasized through the magnitude of funds invested therein, which has increased from 17.3 billion Dirhams in 2006 to 28.7 billion Dirhams in 2012, marking a growth rate of 65%, and also through the volume of written premiums in all insurance classes which has increased from 10.3 billion Dirhams to 26.3 billion Dirhams, marking a growth rate of 155% during the same period.
According to international specialized reports, the sector ranks first at the level of the Arab countries and third at the level of the Middle East in terms of the written insurance premium, which represents a share of 44% of the volume of premiums in the GCC region, and accounts for more than 19% of the volume of premiums in the Middle East.
The rate of contribution of insurance premiums to the UAE gross domestic product recorded about 2%. Additionally, the UAE insurance market is the largest in the Gulf and the Arab region in terms of the number of competencies and specialized experts working in such market, which expresses the importance of the UAE insurance sector at the regional and international levels.
According to the indicators of market performance, and affirmation of experts and specialists in the insurance sector, the IA managed to achieve an advanced turnaround in the UAE insurance market, especially from the legislative and supervisory aspects, which doubled the growth of the sector, developed the competitiveness of the UAE local insurance market, and gave such market a leading role at the regional level.
Such achievements contributed in establishing the role of the sector as an important and key cornerstone in the financial system in the UAE while it reflects the dynamism of the national economy which continues, under the wise directions of His Highness Sheikh Khalifa bin Zayed bin Sultan Al Nahyan, President of the UAE, and his brother His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, supported with the non-oil sectors, including the insurance sector, to achieve an accelerated growth outmatching the growth rates of the neighbor countries and many of the developed countries.
A more advanced stage
The IA achieved excellent and huge steps pushing the UAE insurance sector to a more advanced and progressing stage. The achievements and developments seen in the UAE insurance sector constitute a motive to develop the gains, boost the IA’s position, and improve the performance of the sector to advanced levels regionally and internationally.
The IA continues boosting its role in the development of the performance of the local insurance market and the entities working therein based on legal, technical, and financial principles that take into account the UAE environment from one hand and its foundation on the best international practices on the other hand.
For the sake of the integrity of the financial insurance transactions in the UAE, in 2009 the IA issued procedures related to anti-money laundering and combating of terrorist financing in the insurance activities, in cooperation and coordination with the Central Bank of the UAE and the competent national committee.
In an unprecedented step at the Arab level and at the time it is considered the most comprehensive at the level of Islamic states, the IA issued the Takaful Insurance Regulations in 2010.
Such regulations aim at supervising and controlling the Takaful insurance companies and organizing their business in accordance with the rules of Islamic Sharia. Such regulations set the first legislative foundation to organize the business of Takaful insurance, which contributes to the increasing of the number of Takaful insurance companies in the UAE to 10 companies and the increasing of the insurance premiums written by such companies to 3 billion and 94 million Dirhams, making their share amounts to 12% of the volume of the local insurance market.
Rules of profession practice
In 2010 the IA issued the rules of professional practice and code of ethics for the insurance companies in line with the protection of the rights of policyholders and beneficiaries.
During 2010 the IA issued regulations concerning the organization of the business of loss adjusters and surveyors in the area of organizing the activities of the insurance-related professions. In 2011, the IA also issued instructions for the organization of the activities of insurance agents, which include rules of professional practice and ethics.
At the time the frameworks of dealing between the insurance companies and banks operating the UAE expanded in the area of insurance policy marketing, in 2011 the IA issued the guidelines to organize the dealing of the insurance companies with the banks to market the insurance policies with the objective of organizing the activity of the parties involved in the marketing of insurance policies and protection of their best interests.
As part of the attentions paid to the business of the health insurance claims’ management companies, in 2011, the IA issued the instructions related to the licensing of such type of companies and the organization and overseeing of their activities.
Keeping up with the economic development
To keep up with the accelerated economic development in the UAE, Federal Law number 5 of 2012 has been issued, amending some provisions of the Federal Law number 6 of 2007 concerning the establishment of the IA and organization of its activities which is consistent with some requirements of the competent government entities.
In 2013 the IA issued the Rules of Insurance Brokers and organization of their activities with the objective of improving the work environment of the broker to ensure having qualified brokers and the protection of the best interests of all the relevant parties. The new law includes many new principles and provisions, which contributes to fining appropriate solutions to the problems facing the relevant parties; namely, the policyholders, insurance companies, and insurance brokers. The new Rules set some new controls that govern the relationship between the company and the insurance broker and some rules that govern the relationship between the broker and client.
Financial and Accounting Instructions
The IA is about to issue the financial and accounting instructions as well as regulations that handle some of the motor insurance problems, instructions for the organization of activities of insurance consultants and actuaries, and preparation of the second phase of the organization of activities of the Takaful insurance companies, which all constitute a qualitative addition to the sector and they will contribute to boost the establishment of the UAE insurance market on modern and advanced foundations.
The IA took advanced steps in the area of prudential supervision to ensure the integrity of the technical and financial positions of such companies and how far they abide by the technical grounds for the practicing of insurance and reinsurance operations, through the field inspection and regular and unannounced examination of the insurance companies and related professions.
The IA continues issuing licenses and registration of the insurance companies and related professions upon fulfillment of the required legal requirements.
The number of registered insurance companies until the end of last year amounted to 61 companies, including 34 national companies. The number of insurance agents amounted to 14 agents, and the number of brokers amounted to 170 brokers, including 163 national brokers. The number of insurance consultants amounted to 18 consultants, the number of loss adjusters and surveyors amounted to 69 persons, and the number of actuaries amounted to 31.
The IA conducted 48 inspection tours during the first nine months of 2013, some of them were unannounced, including the companies and related professions, versus 50 inspection visits conducted during 2012.
Such field tours affirm the strong supervisory role of the IA and at the same time they reflect the importance of the field inspection in the IA's activity and work with the purpose of organizing the sector, developing performance of companies, and boosting the positive aspects in their activities and practices, and consequently, developing the competitiveness of the UAE local market as per the latest international standards and practices.
Protection of Insurance Clients
With regard to the protection of insurance clients, and in line with the IA's commitment to serve the citizens and policyholders and protect their right in an optimal and competitive manner, the IA established a special section for policyholders' complaints which is a section dedicated to handle the complaints filed to the IA through specific legal channels, in order to achieve balance and justice between the policyholders' rights and interests of the companies, and consequently improving the comprehensive view to the UAE insurance industry and reinforcing the international confidence therein.
The number of complaints filed to the IA during the first nine months of the current year amounted to 816 complaints, most of them, at nearly 79%, were resolved by the IA while the remaining complaints are still under consideration and examination between all parties.
Emiratization has a strategic position in the IA's agenda
At the IA and sector levels, Emiratization has a strategic position in the IA's work agenda and activities. Through a modern systematic approach, the IA seeks to create skilled and trained national staff to lead the UAE insurance sector. Following the Cabinet declaration of 2013 as the year of Emiratization, the IA adopted a package of initiatives and policies that boost the handling of Emiratization as a priority in the IA at all levels to start their implementation.
The IA seeks to attract the UAE competencies at various departments, besides developing the skills of working national staff through training programs selected by a scientific approach.
The Emiratization Rate has increased in the insurance sector to 7.2% of the total number of employees by the end of 2012, and then it amounted to 7.7% by the end of the first half of 2013.
The IA has a comprehensive and long-term view to Emiratization in the insurance sector, whereas besides seeking to increase the number of UAE citizens, it prepares and rehabilitates the technical staff who can deal with the insurance inputs and outputs at all levels.
To achieve this objective, the Top Management of the IA has recently set plans and initiatives that lead to creating the technical staff capable of giving and producing at all levels, boosting the competitive of the national economy performance, developing its growth steadily, and promoting the attractiveness of working in the UAE insurance sector.
A model initiative
To this end, the IA implemented an advanced model initiative in rehabilitating the UAE competencies, developing their academic achievement, and improving their professional and technical level at the government entities' level. Such initiatives are represented in the rehabilitation and empowering of 36 UAE citizens working in the insurance sector for14 months to obtain the most advanced professional certificate in insurance.
Such certificate is the diploma and Associateship of the Chartered Insurance Institute (ACII) in London which is issued by the Chartered Insurance Institute in London. The IA is currently seeking to launch a new version of such initiatives on an ongoing basis to include more citizens working in the sector.
This course and the associated huge efforts made to conduct and implement it optimally proved that the IA spares no effort developing the scientific potentials and practical abilities of the citizens working in the insurance sector with the objective of boosting the role of citizens in the development of such sector, and increasing their contribution to the economic development in accordance with the wise leadership and government strategy in the area of development.
Intensifying the initiatives in 2013
During 2013, the IA intensified its initiatives and activities in the area of training and boosting the knowledge and educational awareness of the staff, employees in the insurance sector, and the public of policyholders, in line with its efforts to develop the awareness and educational aspects in the local insurance market. The IA organized three training courses and three educational seminars in the field of insurance, in addition to many other administrative and knowledge courses.
All such initiatives contributed to increase the knowledge awareness of those interested in the insurance affairs and fields. With regard to the awareness field, and as part of the IA's commitment to the rights of policyholders, the IA launched many awareness campaigns targeting the policyholders, which concentrated on informing them of their rights and duties. Moreover, the IA participated with the government partners in the awareness campaigns that target policyholders in particular.
The most remarkable of such campaigns was the "Read your Insurance Policy" campaign which encourages the policyholders and beneficiaries to read their insurance policies and learn their details, conditions, and the obligations and rights stated therein before signing and buying the policy. It also notes the importance of selecting the right policy and not just seeking the cheapest one because insurance is needed once the risk occurs not at the time buying the policy.