The outlook for the UAE and GCC's insurance industry is more promising this year than in the previous two years, thanks to a recovery in oil prices and growth in the overall economies, according to industry executives.

"The UAE insurance industry has taken pace once again. There was not tremendous growth last year due to low oil prices and global economic hiccups but now things are picking up. We are looking at the industry more positively from Q2 2018 onwards," said Ghulam Teli, an independent insurance industry analyst.

"Q1 2018 will still have legacy effects of 2017; but we now see the 2017 results of most insurances companies coming out positively which will allow them to invest more in growth," Teli said on the sidelines of the Health Insurance Forum held in Dubai on Tuesday.

Teli projects that the UAE's gross written premiums during 2017-18 will cross the Dh40 billion achieved in 2016.

"The problem in 2017 was that profitability of insurance companies had shrunk. In 2018, both topline and bottomline will be positive. Q1 2017 results were a bit tough for the industry, Q2 saw stabilisation and Q4 witnessed positive results by most companies," Teli added.

Consolidation
Howard Gough, CEO of EMEA, Cigna, said the insurance sector across the region has seen consolidation due to the strengthened regulatory environment.

This has the potential to enhance the industry's efficiency and competitiveness, ultimately creating a more vibrant insurance market, he said.

Teli pointed out that due to heightened competition and too many players in the market, consolidation would take place in the GCC region.

"At the moment, there are three consolidations under process in the GCC because that is the market need. Plus, there are new entrants coming to the market. Those companies which will opt for consolidation will have better profitability and others will have to face negativity," Teli said.

He revealed that discussions are going on for M&As in the UAE but refused to elaborate further.

Commenting on the impact of VAT, Teli said residents and companies have not been affected as badly as expected.

Gough said based on the executive regulation released by the Federal Tax Authority in the UAE, the indication is that there will be an impact on health insurance premiums.

 


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