(BUSINESS WIRE)-- Insurers in the United Arab Emirates (UAE) are forecasted to see strong continued growth in 2013, despite a projection that the UAE’s economy will expand at a slower pace, according to a new report from A.M. Best Co.
The report, titled “The UAE Maintains Insurance Market Hub Status, Despite Economic Slowdown”, states that the UAE is expected to maintain its position as the predominant insurance market within the Gulf Cooperation Council (GCC) region in the short to medium term. A.M. Best notes that economic development in the UAE will continue to assist the insurance market’s expansion, with strong public spending, investment and social programmes expected to continue driving the domestic demand for insurance, particularly in the property, infrastructure, hospitality and tourism sectors. Mahesh Mistry, director, analytics, said: “In recent years, the UAE has benefited materially from oil revenues stimulating economic growth, which in turn has enabled spending on infrastructure. Furthermore, the insurance sector has been buoyed by the introduction of compulsory medical schemes in Abu Dhabi.”
The insurance regulator, the Insurance Authority, has reported a 2012 preliminary estimate for total gross premium written, showing a 10% increase to AED 26.5 billion. In addition to the local market, the UAE hosts The Dubai International Financial Centre (DIFC), which acts as a finance and business hub and is subject to its own bespoke laws and regulations. Established in 2004, the DIFC has become an important hub for foreign insurers attempting to build a presence in the region.
Similar to other GCC countries, the UAE has a highly fragmented market, with 61 registered insurers. Yvette Essen, director, industry research - Europe and emerging markets, and report author, added: “In the direct market, insurers face increasing competition and rate reductions, which may place pressure on performance. Younger companies are feeling pricing pressures from both Takaful and general insurance providers, which make it difficult to achieve ambitious targets for premium volume.”
To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=212027.
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
Contacts
A.M. Best Co.
Mahesh Mistry
Director, Analytics
+(44) 20 7397 0281
mahesh.mistry@ambest.com
or
Yvette Essen
Director, Industry Research
Europe & Emerging Markets
+(44) 20 7397 0322
yvette.essen@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
rachelle.morrow@ambest.com
or
Vasilis Katsipis
General Manager, Market Development
A.M. Best - MENA, South & Central Asia
+(971) 4375 2782
vasilis.katsipis@ambest.com
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