Report on The Insurance Sector In the United Arab Emirates for 2013

: 7/17/2014

 

Report on

The Insurance Sector

In the

United Arab Emirates for 2013

 

 

Statement

of

H.E. Eng. Sultan Bin Saeed Al Mansouri

Minister of Economy

Chairman of the Board of Directors

 

 

I am pleased to present the annual report prepared by the Insurance Authority on the insurance sector activity in UAE during the year 2013 in order to acquaint the reader with the different aspects of UAE insurance market, hoping that the report would achieve the objectives for which it has been prepared; shed light on the most prominent achievements of this important sector and the development attained during the above mentioned year and serve as reference for the researchers and those interested in the insurance affairs inside and outside UAE.

 

Written premiums of all types of insurance amounted AED billion 29.5 (increased by 12.2% as compared to that of the year 2012). This fact ascertains standing of this important sector and the vital roles it plays in the national economy due to the huge amount invested therein which amounted during the year 2013 AED billion 37.8 out of which 57.4% investments in shares and bonds and 26.5% investments in deposits. On the other hand, the total

 

 

equities of the national insurance companies amounted to AED billion 17.5

 

No doubt that the establishment of an independent authority to organize and supervise UAE insurance sector by virtue  of the Federal Law No.6 of 2007 reflects the importance accorded by the State to this sector and 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 is still in the process of completing the organizing legislations. However, several rules and directives have been issued to organize operations of the insurance agents and professions associated with insurance. 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. 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 and since this practice is already in existence in UAE insurance market, 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.

In this respect, I would like to extend my thanks and gratitude to all those in charge of the insurance companies operating in UAE for the cooperation they extended to us by providing  the statistical data; an act having great impact  on issuance of this report.

We ask  Allah the Great to help us to serve our dearest country the United Arab Emirates under the auspices of H.H. Sheikh Khalifa Bin Zayed Al Nahayan, the President of UAE, may Allah protect him and his truthful Deputy H.H. Sheikh Mohammed Bin Rashid Al Maktoum and their brothers their Highnesses the members of the Supreme Council.

 

Eng. Sultan Bin Saeed Al Mansouri

Minister of Economy

Chairman of the Board of Directors

 

 

 

 

 

Report on

The Insurance Sector

In the

United Arab Emirates for 2013

 

Introduction:

Insurance Authority is pleased to present the annual report on the Insurance Sector in the United Arab Emirates for 2013, wherein the indications reflect the development achieved by the Insurance Sector in the United Arab Emirates.

 

This report asserts the significance of this sector and its substantial role in the national economy due to the considerable funds invested therein, which amounted to Dhs. (37.8) bn-.in 2013 while the underwritten premiums amounted to Dhs(29.5) bn-.

 

 

This report aims at identifying the various aspects of the insurance market in the United Arab Emirates and achieving the goal for which it has been prepared i.e. to highlight the most important achievements of the Insurance Sector in the United Arab Emirates.

 

 

 

 

 

 

First: General Frame of the Insurance Sector in the United Arab Emirates:

  1. Legal Frame Organizing Insurance Industry:

     

    The Insurance Sector in the United Arab Emirates is organized by the Federal Law No. (6) of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations which came into effect as on August 28th,2007 and the Board of Directors Resolution No.2 of 2009 on issuance of the executive regulations of

    Federal law No. (9) of 1984 of the said Federal Law and the issued and will be issued rules, regulations and resolutions according to the provisions of the Law.

     

     

  2. Organizational Structure of U.A.E. Insurance Market:

    1. Insurance Authority:

      The Federal Law No (6) of 2007 on Establishment of the Insurance Authority and Organization of the Insurance Operations entrusted the Insurance Authority with the enforcement of the provisions therein and to undertake its role in supervision and control of insurance companies and other insurance related professions so as to provide a suitable environment for the development of the insurance sector, and to enhance its role in the security of individuals, properties and liabilities against risks, and to protect the national economy, build up, develop and invest in the national savings to support the economic development of the State and to provide better services in suitable prices and cover in a competitive environment, and to emirtize jobs in the insurance sector.

       

       

       

       

    2. U.A.E. Insurance Association:

      Established by the Resolution No (62) of 1988 dated 27/9/1988 and its membership encompasses all insurance companies operating in the U.A.E.

  1. General Information on Insurance Companies and Agents and Insurance Related Professions:

    The number of entities recorded in the Special Register until the end of 2013 as follows:

  • Insurance Companies:

    60 Insurance Companies; (34 national insurance companies and 26 foreign insurance companies). The number of companies carrying out all insurance activities (life assurance and operations of fund formation and property and liability insurance) are (11) national companies and (2) foreign companies. The number of companies carrying out property and liability insurance only are (20) national companies and (17) foreign companies. The number of insurance companies carrying out life assurance and operations of fund formation only are (2) national companies and (8) foreign companies, while the number of companies carrying credit export insurance is only one national company.  It is worth mentioning that out of above said companies 10 national companies are carrying out takaful insurance.

     

     

     

     

     

     

  • Insurance Agents:

    (18) Insurance Agents.

  • Insurance Brokers:

    (168) Insurance Brokers; (161 national brokers and 7 foreign brokers).

  • Insurance Consultants:

(19) Insurance Consultants

 

  • Loss Adjusters:

    (72) loss adjusters

  • Actuaries:

          (36) Actuaries.

 

Second: Economic Climate and its implicaction on Insurance Business in the U.A.E.:

The State economy is remarkably stable as a result of the prudent policy adopted by the State through diversification of national income sources. The development of economic, constructional and social activities in the State has its positive impact on the Insurance Sector. The earned premiums of property and liability insurance increased from Dhs.(20.3)bn-. in 2012 to Dhs.(22.5)bn-. in 2013 (an increase of 10.8%) .

 

 

 

 

 

 

Third : Volume of U.A.E Insurance Market and Insurance Benchmarks in 2013:

  • Total underwritten premiums of life assurance and operations of fund formation amounted to Dhs(7)bn-. The share of the national companies amounted 21.8% while that of the foreign companies 78.2%.

  • Total underwritten premiums of property and liability insurance as follows: Dhs(22.5)bn-. The share of the national companies 74.4% while that of the foreign companies 25.6%.

    Percentage of each of the above mentioned types of insurance as follows:

  • 32.8% accidents and liability insurance

  • 9.7% fire insurance.

  • 7.6% land, sea and air transport insurance

  • 44.1% medical insurance.

  • 5.8% other risks insurance.

  • Percentage of the national insurance companies’ retention of underwritten premiums of property and liability insurance 55% while the retention  percentage for each branch as follows:

  • 65.2% accidents and liability insurance.

  • 25.9% fire insurance.

  • 27.4% land, sea and air transport insurance.

  • 63% medical insurance.

  • 19.2%in other risks insurance.

      • Earned premiums of property and liability insurance: Dhs(21.5)bn-.

      • Incurred losses of property and liability insurance before deduction of the re-insurance share Dhs. (14.5)bn-.

      • Loss ratio of property and liability insurance before deduction of the re-insurance share 67.2% in 2013 against 68.1% in 2012. The loss ratio  of each type of the insurance as follows:

      • 63.4% accidents and liability insurance.

      • 41.3 % fire insurance.

      • 29.7% land, sea and air transport insurance.

      • 85.1 % medical insurance.

      • 70 % other risks insurance.

      • Total of the technical provisions of  life assurance and operations of fund formation Dhs. (12.9) bn-  and properties and liabilities insurance Dhs. (9.3)bn-.

    • Total of shareholders' equity of the national insurance companies Dhs. (17.5)bn-.

    • Total of the invested funds Dhs (37.8)bn- 57.4% of this amount in the form of shares and bonds 26.5 % bank deposits).

       

      Fourth : Number of the Insurance Companies Employees:

       

      The number of the employees of the insurance companies operating in the U.A.E. during 2013 reached (8,590) out of which there are only (769) U.A.E. nationals at a rate of 8.9 %.

       

       

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