DIFC gateway to large and untapped insurance market
The Dubai International Financial Centre (DIFC) is positioning itself as the gateway for insurance related companies to tap into "a fertile new market for the insurance industry", the Governor of the DIFC, Dr Omar bin Sulaiman said yesterday. He was speaking at the opening of the World Insurance Forum at the DIFC, the first time it has been held outside Bermuda.
Quoting figures from Moody's, he said the MENA region and Indian sub-continent represents just 0.2 per cent of the world's insurance market. Yet it offers sound future growth potential for insurers, boosted by infrastructure and other investments and rising GDP per capita. The region also has a population of 2.1 billion people and a combined economy worth $2.3 trillion in terms of GDP.
Furthermore, governments in the region are encouraging individuals to save for their retirement and are introducing compulsory insurance for certain non-life risks, said Bin Sulaiman. "Consequently, the rates of growth of insurance premiums in our markets have far exceeded those seen globally and Moody's expects this trend to continue for the next few years," he said.
The UAE is the largest insurance market in the Middle East, growing by 27 per cent in nominal terms in 2006, with total premium volumes reaching $2.7 billion. Total insurance penetration as a percentage of GDP is just 1.7 per cent compared with a global average of 7.5 per cent.
Bin Sulaiman gave three reasons why insurance-related companies should set up business in the DIFC. First, it is an onshore financial centre where no retail business or direct insurance business is conducted. "Our aim has been to establish Dubai as a re-insurance hub with a captive domicile on a par with established domiciles such as Barbados, Bermuda, BVI, Cayman Islands, Guernsey, Ireland, Isle of Man, Luxembourg and Vermont," he said.
Second, in the Gulf and across the world, the rate of growth of takaful, or Shariah-compliant insurance, is far outstripping that of conventional insurance. While the global average annual premium growth rate stands at about 2.5 per cent in the wider Middle East, the takaful market segment is growing by 20 per cent a year. "Takaful premiums in the GCC states are increasing by a phenomenal 40 per cent a year. There are more than 60 takaful companies operating in 23 nations. Worldwide takaful premiums are estimated to be in excess of $2 billion, representing roughly 9 per cent of global insurance market. Recent projections show that the industry could be worth as much as $7.4 billion by 2015," Bin Sulaiman commented. (MENAFN)
Quoting figures from Moody's, he said the MENA region and Indian sub-continent represents just 0.2 per cent of the world's insurance market. Yet it offers sound future growth potential for insurers, boosted by infrastructure and other investments and rising GDP per capita. The region also has a population of 2.1 billion people and a combined economy worth $2.3 trillion in terms of GDP.
Furthermore, governments in the region are encouraging individuals to save for their retirement and are introducing compulsory insurance for certain non-life risks, said Bin Sulaiman. "Consequently, the rates of growth of insurance premiums in our markets have far exceeded those seen globally and Moody's expects this trend to continue for the next few years," he said.
The UAE is the largest insurance market in the Middle East, growing by 27 per cent in nominal terms in 2006, with total premium volumes reaching $2.7 billion. Total insurance penetration as a percentage of GDP is just 1.7 per cent compared with a global average of 7.5 per cent.
Bin Sulaiman gave three reasons why insurance-related companies should set up business in the DIFC. First, it is an onshore financial centre where no retail business or direct insurance business is conducted. "Our aim has been to establish Dubai as a re-insurance hub with a captive domicile on a par with established domiciles such as Barbados, Bermuda, BVI, Cayman Islands, Guernsey, Ireland, Isle of Man, Luxembourg and Vermont," he said.
Second, in the Gulf and across the world, the rate of growth of takaful, or Shariah-compliant insurance, is far outstripping that of conventional insurance. While the global average annual premium growth rate stands at about 2.5 per cent in the wider Middle East, the takaful market segment is growing by 20 per cent a year. "Takaful premiums in the GCC states are increasing by a phenomenal 40 per cent a year. There are more than 60 takaful companies operating in 23 nations. Worldwide takaful premiums are estimated to be in excess of $2 billion, representing roughly 9 per cent of global insurance market. Recent projections show that the industry could be worth as much as $7.4 billion by 2015," Bin Sulaiman commented. (MENAFN)
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