UAE: Composite insurers to segregate life and non-life ops by August
Source: Middle East Insurance Review | Jul 2016
The separation of general insurance business from life operations among composite insurers is expected to be completed in August, according to Mr Ebrahim Obaid Al Zaabi, Director General of the UAE Insurance Authority (IA).
A law has been passed for composite insurers to separate their life and non-life businesses. Last year, these companies were given an extension to the end of August 2016 to comply with the law.
Mr Al Zaabi said in an interview with the Al Khaleej newspaper that some local insurers have proposed that a life insurance company be set up in which all local insurers would have a stake. The proposed life insurer would have a capital of up to AED1.5 billion (US$408.4 million).
The life insurer would help composite insurance companies. This is because some insurers might find that after splitting up their composite businesses, their segregated life insurance operations might lack adequate scale. These companies would be given time to transfer their life operations to the proposed new umbrella company.
Mr Al Zaabi said that the life market in the UAE is worth around AED8 billion, of which 81% is generated by foreign insurers. He said that the current situation is not in the interests of local companies.
He added that the IA is undertaking studies on the issue and will make the appropriate decision. Referring to the proposed life insurer, he said: “We are confident that the life insurance market will develop well, with the crystallisation of the project and its launch.”
There are currently 13 composite insurers – 11 local and two foreign companies – in the UAE out of a total of around 60 insurers. There are also 37 non-life insurers and 10 life insurers. Overall, the UAE insurance market is expected to have grown by 10.4% to reach AED37 billion last year.
AED1 = US$0.27