Insurance Authority Issue 2011 Annual Report

: 9/17/2012
The Insurance Authority issued 2011 annual report on UAE insurance sector activities. The report reveals the gross investments in the sector last year amounting AED 25.6 billion, while the written premiums of all insurance classes amounting AED 24 billion. Figures indicate that 45.2% of these funds have been invested in securities and bonds, while 34.6% have been invested in deposits and 19.8% in lands and real estates. Written premiums of property and liability insurance amounted to AED 19 billion and insurance of person and fund accumulation operations amounted AED 4.8 billion. The number of the insurance companies operating in the State reached 61; out of which 34 companies are national and 27 foreign ones. Meanwhile, the number of UAE national employees reached 521 as compared to 397 in 2010 with a growth rate of 31%.

Gross compensations paid by the insurance companies for property and liability insurance amounted AED 10.5 billion; out of which AED 4.3 billion has been paid for health insurance, AED 3.9 billion for accident and liabilities insurance; while the gross rights of the shareholders of the national insurance companies amounted AED 14.1 billion.

 

Dubai headed UAE insurance market as to the general insurance gross written premiums amounting AED 8.8 billion and then followed Abu Dhabi with premiums amounting more than AED 6.5 billion.

 

Sector Indices:

 

In details, the insurance Authority report on 2011 UAE insurance sector’s activity reveals the gross written premiums of all insurance classes to amount AED 24 billion against AED  22 billion in 2010 with an increase of 9%, drawing the attention that the funds invested in the sector amounting AED 25.6 billion against AED 27.6 billion in 2010.

 

According to the insurance Authority’s figures, 45.2% of the funds invested in the sector have been invested in securities and bonds compared to 48.2% in 2010, while 34.6% of these funds have been invested in deposits compared to 32.5% in 2010. However, Land and real estates picked up 19.8% of these funds compared to 18.1% in 2010.

 

The gross premiums of the insurance of persons and fund accumulation operations amounted to AED 4.8 billion compared to AED 4.0 billion in 2010. The share of the national insurance companies of these premiums amounted 29.8% and the foreign ones 70.2%. Further, the gross premiums of the property and liability insurance amounted AED19 billion. The share of the national insurance companies of these premiums reached 75.9% and that of the foreign ones 24.1%.

 

The gross rights of the shareholders of the national insurance companies remained unchanged at AED 14.1 billion in comparison of that of 2010, while the technical provisions of all insurance classes amounted AED 14.9 billion.

 

Property & Liability Insurance:

 

According to the report, the written premiums of the insurance of property and liability intensified from AED 18 billion in 2010 to reach AED 19 billion with a growth rate of 5.6%. Accident and liability insurance headed the list of the gross written premiums of the property and liability insurance of the national and foreign companies after reaching AED 7.9 billion as compared to that of 2010. Then followed health insurance with premiums amounting AED 4.96 billion against AED 4.11 billion, while the gross premiums of fire insurance amounted AED 2.5 billion against AED 2.2 billion and those of air, land and sea transport amounted AED 2.3 billion against AED 2.2 billion and other risks amounted AED 789 million against AED 591 million in 2010.

 

Retention Ratio:

 

The report showed that the national insurance companies’ retention ratio of the written premiums of property and liability insurance at 55.6% of the gross premiums, accident and liability insurance 64.8%, fire 38.2% and air-land-sea transportation 30.1%, health insurance 64.3% and other risks  22.3%.

 

The gross written premiums of the property and liability insurance amounted to AED 18.8 billion, while the total technical provisions of the insurance of persons and fund accumulation operations amounted to AED 7.3 billion and that of the property and liability insurance AED 7.6 billion.

 

Paid compensations:

 

Average total compensations in 2011 reached 56.6% against 57.4% in 2010, while compensations of the property and liability insurance reached 55.7% before deducting re-insurance against 57.4% in 2010. Compensations of accident and liability insurance reached 44.9%, fire 54.2%, air-land-sea transportation 33.3%, health insurance 81.3% and other risks 60.7%.

 

Figures showed the total compensations paid by the insurance companies during 2011 for property and liability insurance amounting AED 10.5 billion; out of which AED 4.3 billion health insurance and AED 3.9 billion accident and liability insurance and more than AED 1.0 fire compensations, AED 815 million air-land-sea transportation and around AED 363 million other risks.

 

Figures indicated that the total compensations under settlement at the end of December 2011 amounting AED 7.1 billion; they are mostly related to motor and health insurance. However, the national insurance companies paid AED 8.4 billion in compensations, while the foreign ones paid AED 2.1 billion.

 


 

 

Laws & Legislations:

 

The insurance Authority has shown in the preface of its annual report importance of the insurance sector and its vital role in the national economy and the huge invested funds amounting AED 25.6 billion in 2011, drawing the attention that UAE’s economy is characterized to be stable due to the wise policy adopted by the State to diversify the national income resources which had its reflections on development of the economical, architectural and social activities in UAE.

 


 

 

The insurance Authority affirmed that the establishment of an independent authority to organize the insurance sector by virtue of the Federal Law No.6 of 2007 reflects the importance accorded by the State to this sector and to its role in protecting the activities related to the economical, commercial, industrial and architectural sectors and providing health protection to all segments of the society, assuring that this care has put up additional responsibility on the Insurance Authority’s officials to exert maximum effort to complete the legislation organizing the sector, avail a technically qualified cadres and pay heed to ongoing training to keep up with the development and to ensure implementation of the best international standards to organize the market.

 

The insurance Authority went on adding that the Authority is still in the process of completing the organizing legislations in addition to the rules, regulations and directives referred to in its report of 2010 indicating that the Insurance Authority’s Board has already issued the Resolution No.6 of 2010 on the cost adjusters’ regulations, Resolution No.8 of 2011 on organization of the insurance Agent’s works and the Resolution No.9 of 2011 on TPA’s Directives. Further, the insurance Authority completed preparation of all the financial regulations been prepared by an international expertise house. However, opinions of the insurance companies and the actuaries have been taken into consideration by circulating these regulations among them and amending same by inserting the suitable recommendations given as so and in the ad-hoc workshops as well.

 

The insurance Authority assured that these regulations when issued will play positive role in stability of the insurance market. The insurance Authority, as well, prepared regulations on marketing insurance policies through banks showing that this practice is already in existence in UAE insurance market. As a result, these guiding rules have been prepared to organize the insurance companies’ transactions with banks in the field of marketing insurance policies for implementation pending issuance of the regulations.

 

UAE Insurance Market:

 

Dubai headed UAE market in terms of the gross premiums of the general insurance of the insurance policies sold in the Emirate as the total number of the insurance policies reached more than 1.3 million with written premiums amounting AED 8.8 billion and then followed Abu Dhabi by more than one million insurance policies with written premiums amounting AED 6.5 billion, while the total number of the policies in Al-Ain City reached 344,000 with premiums amounting AED 491 million. The number of the policies in Ras Al-Khaimah reached 77,000 with premiums amounting AED 191 million, Fujairah 87,000 policies with premiums amounting AED 126 million and Ajman 63,000 policies with premiums amounting AED 105 million.

 


 

 

Insurance Agents:

 

The report showed that the number of the insurance agents reached 11 and that of the insurance brokers 170; out of which 163 national brokers and 7 foreigners, while the number of the insurance consultants 18, the cost adjusters 69 and the actuaries 25.

 


 

 

Insurance Companies’ Number:

 

The insurance Authority’s report showed the number of the insurance companies operating in the State 61; out of which 34 are national companies, while 27 are foreign ones. The number of the insurance companies carrying out all kinds of insurances (insurance of persons and fund accumulation operations and property and liability insurance) is 11 national and 2 foreign companies.

 


 

 

The number of the insurance companies carrying out property and liability insurance amounted to 20 national and 17 foreign companies and those carrying out insurance of persons and fund accumulation operations amounted to 2 national and 8 foreign companies. However, there is a single national company carrying out export credit. It’s recalled that 10 national companies are adopting takaful insurance regulations.

 

Premiums:

 

The insurance Authority’s report showed in details the insurance sector activity in 2011 related to each kind of property and liability insurance percentage rate. The report as well showed that accident and liability insurance acquired 41.3% of the gross premiums, fire 13.1%, air-land-sea transportation 12.1%, health 29.4% and other risks 4.1%.


 

 

Insurance Sector Employees’ number & remunerations:

 

The number of the insurance sector’s employees reached 7998 against 7271 employees in 2010 with a growth rate of 9% and that the number of the national employees in the insurance companies reached 521 in 2011 against 397 employees in 2010 with a growth rate of 31%. Meanwhile, their number compared to the total number of the employees of the insurance companies reached 6.5%. The figures showed that the gross remunerations of the employees of the insurance companies in all UAE emirates amounted to AED 922 million; out of which AED 468 million for 3500 employees in Dubai and AED 262 million for 2800 employees in Abu Dhabi. However, the gross remunerations of the employees of the insurance companies for the six years 2006-2011 amounted to AED 4 billion.

 

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