UAE: Regulator drafts legal framework for M&A in insurance sector
Source: Middle East Insurance Review | Mar 2019
The UAE Insurance Authority (IA) said that it is developing a legal framework to regulate M&A in the insurance sector to ensure that the deals are transparent and fair.
The regulator said it stands ready to help companies wanting to merge with or acquire other companies, reported Al Bayan. The IA is keen to see strong financial institutions capable of expanding into international markets, diversifying their offerings and retaining greater risk instead of placing the bulk of their premiums in the global reinsurance market.
The regulator also said that mergers could contribute to the reduction of operating expenses. In addition, increased benefits could result from the integration of the client bases of the two integrated companies.
Given the saturation in the insurance industry, the quickest way for investors, including foreign insurers, to enter the UAE market is through acquisitions, the IA said. The legal framework may lead some to think seriously of M&A as a logical solution to continue to stay viable and compete in the market. M