One of the most notable transformations in the UAE insurance market in recent years has been the growing awareness of insurance and the realisation that insurance is more than just purchasing a policy, according to Union Insurance's CEO, Mr Ramez Abu Zaid.
Mr Abou Zaid told the newspaper Al Khaleej that customers now clearly differentiate between types of coverage and appreciate the role of insurance companies at the moment of a claim or risk. He added, “Customers don't just remember the price of a policy, but rather look for what stands by them and provides them with a smooth insurance experience, and whether the company supports them and facilitates payment procedures. Customers then realise which companies are performing their roles with integrity and professionalism.”
Mr Abu Zaid, who took up his current position in February 2024, also said that the most significant challenges facing the insurance industry in the UAE currently are intense competition and pricing pressures, in addition to the stringent terms of reinsurance agreements.
He said that insurance companies adopt different strategies in dealing with the market. This has created a clear disparity in results, performance, and prices in the sector. He said, “Some companies have sought to increase their market share as much as possible by offering competitive prices, without sufficient focus on accurately pricing risks. On the other hand, other companies aim to maintain a good level of profitability and their market position, while preserving the quality of their services, reputation, and financial stability.”
He indicated that despite the challenges, the insurance sector will witness positive growth in the coming years, especially in light of the UAE's ambitious economic plans.
Mr Abu Zaid emphasised the pivotal role played by the Central Bank of the UAE in regulating the sector. He added that the laws and regulations in the UAE governing insurance companies have evolved significantly, becoming similar to those in place in developed countries, which positively impacts the performance of insurance companies and enhances their technical, financial and administrative stability.
He believes that the number of insurance companies currently operating in the country is sufficient. At present, there are around 60 licensed insurance companies in the country.
He added the mergers currently underway in the industry are “in the right direction, leading to a reduction in the number of companies, strengthening the financial positions of insurers, and improving the quality of services provided to customers.”