UAE: Insurers get one more year to separate life and non-life businesses
Source: Middle East Insurance Review | Oct 2015
The UAE Cabinet has issued a resolution granting composite insurance companies operating in the country one more year starting from 28 August 2015 to separate their life and non-life businesses.
Mr Sultan bin Saeed Al Mansouri, Minister of Economy and Chairman of the Insurance Authority, said in a press statement that the decision to grant composite insurers an additional period of one year to regularise their positions is part of the UAE leadership’s approach to support local insurers and improve their performance.
A 2007 insurance law makes it mandatory for composite insurers to set up separate life and non-life businesses. The deadline for doing so was originally five years from 2007, but had been extended to 28 August this year.
Earned premiums for the non-life sector stood at AED24.9 billion (US$6.8 billion) in 2014, while total written premiums in life insurance amounted to AED8.6 billion.
There are 13 composite insurers in the UAE, including 11 local companies and two foreign companies. The total number of insurers in the country stands at 60, with 37 engaged in non-life business and 10 in life business, of which only two are local companies.
Insurance industry executives told Emirates Today that they welcome the postponement, saying that it would help smoothen the transition from composite business.
Some said that the additional time would allow local composite insurers to increase their share of the life insurance market, through a greater focus on this line of business.
A senior insurance executive said that smaller composite insurers, which have do not have sufficiently large life insurance portfolios for operations to be financially viable, might have to sell these operations to other insurers.
AED1 = US$0.27