Looking ahead to the latter half of 2014, we maintain an optimistic outlook for the UAE insurance sector. However, growth will be some way off the market's potential capacity. This is in spite of positive macroeconomic figures for the country as a whole. Barriers to expansion, including low penetration levels, a fragmented market and price competition, continue to hinder companies. Moreover, the life segment is largely reliant on expatriate demand. Nevertheless, the UAE represents one of the most dynamic and stable insurance sectors in the Middle East and North Africa (MENA)]
Considering forecast economic expansion, as well as instability in neighbouring countries, we remain of the view that the UAE will maintain its position as a dominant regional insurance market over the forecast period. The financial reports from listed insurance companies for 2013 and Q114 confirm BMI's expectation of consistent, yet unspectacular growth. This is true of both segments, which will experience mid-high, single-digit growth over 2014. Moreover, slightly higher expansion in life insurance will lead to the life segment occupying a greater share of total insurance premiums. In part we attribute this to an expanding expatriate community, which is required to have health insurance. However, underperformance in the non-life segment is likely to be the dominant cause of a re-adjustment in the makeup of total premiums.
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We welcome commitments on the part of the regulator to implement regulatory reform as a step towards cultivating higher growth in the sector. However, we maintain a cautious view looking ahead and do not see penetration levels (i.e. gross premiums over GDP) rising over the forecast period. We maintain the view that the sector may see a form of consolidation. We base this analysis on the relative size of the UAE's largest insurers, such as Salama, Oman Insurance Company and Abu Dhabi National Insurance Company (ADNIC), which would rank as no more than...
The United Arab Emirates Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's United Arab Emirates Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Emirati insurance industry.
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