Sunday, November 9, 2014
Al Mansouri: The UAE ranks number 1 regionally for expenditure on insurance services per capita
Date: October 30, 2014
H.E. Eng. Sultan Bin Saeed Al Mansouri, H.E. Eng. Sultan Bin Saeed Al Mansouri, Minister of Economy and Chairman of the Insurance Authority (IA), asserted that new projects that have been declared in the local market will open up new doors and opportunities. Opportunities have also been presented after the nation hosted Expo 2020 in Dubai, and as a result of foreign investment flows for various economic and development sectors. Al-Mansouri called upon the insurance companies to promote their investments and expand in competitive insurance products, while taking advantage of the economic growth seen in all sectors.
In his recorded speech to the 11th Annual Gulf Insurance Forum, which was launched in Dubai yesterday, he added that the UAE recorded the highest rate of expenditure on insurance services per capita in the MENA. It has also ranked number one amongst the emerging markets in terms of the efficiency and diffusion of its insurance products.
He indicated that the UAE is one of the most dynamic markets in the region, noting that the total value of the underwritten premiums for all insurance branches in the UAE market recorded AED29.5 billion in 2013, marking a growth rate of 12.2% when compared to 2012. At the same time, the amount of money invested in the insurance sector amounted to AED37.8 billion, thereby marking an increase of 32%.
Al Mansouri affirmed the importance of certain requirements made of the Gulfs insurance market in general. The most important core issues are: continuing the development of the regulatory and legal environment, promoting supervisory risk assessment tools, developing standards related to technical and investment aspects (particularly solvency and the optimum use of capital), and improving transparency and governance.
A comprehensive document
The UAE’s Insurance Authority plans to issue the financial regulations that apply to insurance companies in a comprehensive document that will include all the financial, technical, and accounting regulations. The document will also include the principles of investment and the total and secondary investment rates before the end of this year. The IA asserted that it will grant the companies an adequate grace period in which to regularize their status in accordance with the new requirements. This will avoid any adverse impact that may arise following the adoption of the requirements.
Saleh Rashid Al Dhahiri, President of the Executive Board of the Gulf Insurance Federation, said that the role of the insurance supervisory and control authorities is not limited to the regulation of local insurance markets only. It also includes contacting overseas insurance markets and supporting the markets. These efforts are subject to their supervision in terms of developing the supervisory regulations, legislations, and laws, developing insurance coverage, and developing IT systems.
Al Dhahiri asserted that “the supervisory efforts made to control insurances of both types, traditional and Takaful, in the GCC states have managed to adhere to global supervisory and control standards. It has achieved this through constant legislative amendments and by coping with global developments”.
In his speech during the first session, Maher Ismail Afana (assistant financial expert at the UAE’s IA) said that the IA plans to issue financial regulations to regulate the activities of insurance companies before the end of this year. He affirmed that there will be an adequate period that will be granted so that companies can adjust their status. Companies will thus avoid any adverse impact arising from adoption.
He noted that the financial regulations will be issued within a comprehensive document that will govern the activities of traditional and Takaful insurance companies. The regulations will contribute to controlling the investments of insurance companies by defining the maximum total investment levels and minor limits for different investment areas. This will mean that investment is diversified within the tools available inside the UAE or abroad.
He asserted that the model adopted by the IA is based on the international pioneer’s experiences and principles. At the same time, it considers the special nature of local companies and markets. Afana noted that the IA has distributed the regulations to the companies before receiving their remarks and hiring international think tanks. The IA will impose a few requirements in order to receive quarterly and annual reports that will enable the IA to practice supervision and control in a timely and adequate fashion.”
In his speech that preceded his moderating of the first session, Abdel Khalek Raouf Khalil (General Secretary of the General Arab Insurance Federation) highlighted the importance of regulatory authorities developing a regulatory environment and legislative structure. In addition, authorities must expand insurance awareness and focus on the development of market techniques.