• Home
• /
• Business

'Joint Gulf re-insurance firm to be set up soon'

Speaking to Banking and Finance magazine, he said that an international body is preparing a feasibility study for setting up a joint gulf re-insurance company.

Outlining the current situation of insurance market in the UAE, he said that the situation was good regardless of competition and the large number of foreign and local insurance companies. "Here we must notice that local companies have the technical experience and financial ability which enables them to provide different insurance services, and at a distinguished level. That would also enable them to compete with international companies as they have large experience and are well aware of the demands of the local insurance market in the UAE."

"The large number of local brokers, about 200, is negatively affecting the insurance market in the UAE. Accordingly, the UAE Insurance Association is about to submit proposals to the UAE ministry of economy and commerce to organise the work of insurance brokers in the UAE."

Referring to the establishment of a higher insurance authority in the UAE, he said that the establishment of a higher authority for insurance was the ideal solution as it would be the official specialist body to fully look after the affairs of the insurance sector in the UAE. When incorporated, the authority would be the official body to deal directly with organising the work of insurance in the uae, help to increase the performance of national companies to enable them to compete with international companies. And the main objective was to maintain the interests of all parties related to the insurance industry. "I would like to mention that the members of this authority will represent the ministry of economy and commerce and other relevant federal bodies and representatives of authorities and bodies directly related to insurance sector in the UAE.

Highlighting the effort for emiratisation in the insurance sector, he said that emiratisation in the insurance sector was going on well. "The Emirates Insurance Association is making great efforts in this regard in cooperation with the insurance companies. The fact is there is a big response from insurance companies regarding emiratisation, as well as the huge ability from the emiratis — university and higher college graduates in particular —to work with insurance companies. God willing, we will achieve the needed rate of emiratisation in the insurance sector by the end of this year."

Answering questions about the current situation of national insurance companies to meet the demands of the WTO and strategies to face the challenge posed by giant international companies coming to work in the local market, he said that national insurance companies were not isolated from the international market and with all its latest developments. In any case, some of these companies need to correct their financial status and to have the needed competent and qualified cadres.

"They would also haveto adapt to the advanced insurance programs which could meet the demands of the market in the current periodof globalisation."

About the possibilities of mergers of local companies, he said that mergers "are a positive thing in general. Especially for insurance companies, as that would enable them to expand their services and their technical capabilities enabling them to compete strongly and to develop further.

Referring to steps towards forming a local or a Gulf re-insurance company, he talked about a project to establish a joint Gulf re-insurance company. "The coordination authority for insurance and re-insurance companies in the Gulf region has already delegated an international experienced house to make the needed economic study for this purpose. As soon as they do that, their study will be submitted to the special committee of the general secretariat of the GCC states."

He declined to acknowledge the possibility of encouraging banks to enter the field of life insurance within the framework of a comprehensive bank, saying each respective body had its own speciality. Conflict of responsibilities would cause unnecessary troubles. "Insurance companies and insurance brokers are capable enough to carry out their assigned duties.

Weighing the current and future situation of Islamic insurance companies in the local and international markets, he said that Islamic companies were meeting the demands of some people in the UAE and in the Arab and Muslim countries.

They carry out insurance in a way to comply with Islamic Sharia concepts. "Accordingly, they do meet the demands of these people, bearing in mind that Islamic insurance companies are just beginning to emerge and they need to be more developed so as to meet the current demands.