The United Arab Emirates’ insurance sector is likely to expand about 10 per cent this year, and growth may accelerate after reforms which are currently being planned, the director-general of the government’s Insurance Authority said on Monday.
Total premiums underwritten in 2012 were Dhs26.8 billion ($7.3 billion), up 9.5 per cent over the previous year. Growth will be similar this year, Ibrahim Obaid al Zaabi told reporters.
“We have to introduce new laws and regulations to regulate the whole sector to achieve more growth,” he said.
Among such reforms are the setting up of a central sharia board of scholars to regulate takaful (Islamic insurance), and the introduction of regulations for insurance brokers, both of which are in the final stages, al Zaabi said. An international consultancy has been hired to draw up regulations, he added without naming it.
With 61 insurance companies, including 10 that provide takaful, the UAE’s insurance market expanded at an average annual rate of 9.6 per cent between 2008 and 2012. But the sector contributes only around one per cent of the country’s gross domestic product, said al Zaabi, adding that authorities aimed to expand that to three per cent by 2020.
Property and motor insurance are the major non-life insurance businesses in the UAE.