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UAE insurance sector to double by 2010

DUBAI — The UAE's insurance sector will double by 2010 and a significant part of the market's annual 15 to 20 per cent growth will be driven by the exponential increase of the region's logistics industry, according to Shaikh Ahmed bin Saeed Al Maktoum, President, Department of Civil Aviation, Government of Dubai.

“Logistics is one of the insurance industry's biggest revenue providers due to its highly diverse requirements ranging from the shipment of goods, storage and warehousing of commodities and perishables, and from fire and flooding building insurance to staff medical policies,” said Shaikh Ahmed.

Shaikh Ahmed was speaking prior to a briefing to the UAE's insurance community on the development plans of Jebel Ali Airport City, of which Dubai Logistics City - a key element of the world's first integrated logistics and multi-modal transport platform - is an integral part. The event was attended by more than 50 UAE insurance industry representatives.

“As logistics is one of the key economic development drivers within the UAE, and most particularly Dubai, the insurance community will need to service clients in this particular sector in the most convenient manner and by staying close to them,” said Michael Proffitt, CEO, Dubai Logistics City.

The UAE boasts the largest number of insurance companies in the GCC. The advent of international companies following last year's government decision to open the market to foreign competition means that the sector has entered a new dynamic development phase.

“Freight forwarders, supply chain specialists and logistics companies need not only insure their own assets and equipment but also take policies out on their clients' behalf and this makes DLC a premium business base for the insurance industry,” he said.

UAE-based insurance and reinsurance specialists attending the briefing, included Abu Dhabi National Insurance, Qatar General Insurance and Reinsurance, Oman Insurance Company, Arab Orient Insurance, HSBC, BUPA, Allianz, Norwich Union Insurance, Royal & Sunalliance, AIG and Islamic Arab Insurance.

“Primarily we wanted the insurance industry to understand the facilities and services which will be available to them at Dubai Logistics City and Jebel Ali Airport City so we can factor their physical requirements into the developments” said the DLC CEO.

Islamic insurance specialists are also likely to be among DLC's clients due to the Takaful and Re-Takaful requirements of the freight forwarding companies, which will select DLC as their base. DLC, which will also be a freighter airport, is to be operational by end of 2007 and is designed to eventually handle more than 12 million tons of air cargo annually in up to 16 air cargo terminals capable of handling the new generation Airbus A380-800F freighter version of the giant airliner.

DLC is to be the preferred location for businesses which require, or offer, logistics and multi-modal transport services to the GCC, the wider Middle East, India, Africa and the CIS - a market of more than two billion consumers. A recent industry report has valued the GCC logistics market alone at over $11 billion.