Insurance Tendency In The UAE Of Medical, Life & Travel Insurance
The insurance division has a very prominent role to play for the growth of an economy. It is believed to be one of the most significant tools to manage the risk in society. Increasing security concerns across the world has increased the scope of insurance in many spheres. Any tangible risk can possibly be insured. Particular kinds of risk that may contribute to raise the claims are known to be called as perils. A policy specifies in details which perils are covered by the policy. Followed by today’s’ trends, types of insurance have considerably increased. Motor, health, home, life, disability, casualty, life, property, liability, kidnap & ransom, legal expenses, livestock, media liability, business, collateral protection insurance, defense, expatriate, pollution, purchase, title and travel insurance are some of the types.
Growing population and developing infrastructure have increased the scope of insurance in Gulf region.
Industry in GCC is growing rapidly within a challenging environment. The number of companies is increasing and firms are coming up with innovative ideas and offers contributing to develop a healthy competition. Saudi Arabia and United Arab Emirates are the biggest players in the industry having a combined share of 75%. Qatar is assumed to become the third biggest player with thirty percent contribution rate. The UAE insurance segment abides by the Federal Law (9) of 1984. In the UAE, life insurance is not practiced at large scale due to some religious, cultural and financial barriers. Until the end of 2005, there were 48 insurance companies in the UAE. Among them 24 were UAE based firms and others were foreign companies. Eleven national and two foreign companies offered life insurance policy, and eighteen foreign and eleven domestic companies offered non-life insurance policies.
During 2006, within United Arab Emirates, Dubai was the biggest contributor in the industry with Abu Dhabi being the second with 35 percent. Both covered 83% of the UAE’s premium. Sharjah insurance is the next competitor. Life insurance in Dubai and other emirates said to be increased in recent years. Many world class life, vehicle, business and medical insurance companies are providing the best opportunities in Dubai. Number of Dubai, Abu Dhabi and Sharjah insurance companies are believed to grow in this decade.
The sector is estimated to expand at faster rate followed by growing population across the country. According to the research, UAE is expected to become the most prominent insurance industry in the region by 2015. According to estimation, there is a possibility of UAE insurance sector to grow at Compound Annual Growth Rate of 19 percent with a balanced trend of life and non-life divisions with life insurance encompassing 14 percent and non-life insurance segment encompassing 86%.
With increasing expatriate population, travel insurance is gaining popularity in UAE. The region has an exceedingly huge young population so the demand for life and medical insurance companies is growing with a great demand of life insurance in Dubai. There are some loopholes within the system like lack of comprehensive information on trends. Secondly, the companies need to improve their risk management competence and also enhance their investment management skills.
Andy Robert is a reputed Medical insurance companies agent, and has been working in the local Life insurance in Dubai and Travel insurance business for the last three years. He has worked as a consultant with a number of reputed financial institutions, and is currently residing in Abu Dhabi.