The region's reinsurance industry could triple in size to generate more than US$15 billion (Dh90.81bn) in additional revenues if the Gulf could increase the low amount of insurance sold to reach the world average.
The prediction from Gulf Re, one of the region's largest reinsurers, comes as the industry is hit by a decrease in demand as developers buy less construction cover, merchants need less insurance with shrinking trade, and individuals buy less car insurance.
"If regional penetration rates were to reach closer to the world average of 7.5 per cent, that could potentially generate over $15bn of additional annual premiums for the industry," said Gail Norstrom, the chief executive of Gulf Re.
Gulf Re, which started operating in October, is a joint venture between Gulf Investment Corporation (GIC), an investment company owned by the GCC, and Arch Capital, an insurer based in Bermuda.
The Dubai International Financial Centre Authority (DIFCA) is trying to attract more reinsurance companies to the emirate as many international groups move to increase their presence in the region.
"The potential for development of the insurance industry across the DIFC is huge," said Abdulla al Awar, the chief executive of the DIFCA.
"The historically low insurance penetration levels seen from within the region are likely to grow exponentially over the few years to those experienced in more developed markets."
Primary insurers pass on a portion of their risk to reinsurers to reduce the risk on their own books.
The Gulf is extremely under-insured by global standards, with only 1 per cent of the region's GDP spent on insurance.
So far, the region accounts for 0.5 per cent of the world's non-life insurance premiums, which equals about $7.2bn. Of that, about $4bn is reinsured.
Gulf Re said prospects for newcomers in the region were good as primary insurers are reinsuring more widely than before the crisis.
The company is seeking to generate more reinsurance in infrastructure. "We see continued government investment in infrastructure projects throughout the region as a huge positive for the sector," Mr Norstrom said.
The regional insurance sector is still suffering from the effects of the financial crisis on the real economy, said Michael Gertsch, the chief underwriting officer of Gulf Re.
"A lot of building is being put on hold, so they (the developers) need less insurance cover," he said. "As that market shrinks, they need less material so this impacts marine insurance. And as people leave they need less car insurance."
Insurance growth has slowed from an average of between 15 and 20 per cent in recent years to an expected 7 or 8 per cent this year.
Gulf Re sees business opportunities in high-value oil and gas projects, and plans to expand into the offshore energy sector in a few years. It expects to generate $25 million in premium income this year, and wants to reach $100m in three years.
Gulf Re underwrites property and casualty lines of reinsurance, including energy, commercial transport, marine, engineered risks and property.
It generates about two thirds of its business in the UAE, with the rest in Saudi Arabia and Kuwait.
uharnischfeger@thenational.ae
Company%20profile
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
BLACK%20ADAM
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MATCH INFO
Fulham 0
Aston Villa 3 (Grealish 4', Hourihane 15', Mings 48')
Man of the match: Jack Grealish (Aston Villa)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
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RESULTS
Catchweight 82kg
Piotr Kuberski (POL) beat Ahmed Saeb (IRQ) by decision.
Women’s bantamweight
Corinne Laframboise (CAN) beat Cornelia Holm (SWE) by unanimous decision.
Welterweight
Omar Hussein (PAL) beat Vitalii Stoian (UKR) by unanimous decision.
Welterweight
Josh Togo (LEB) beat Ali Dyusenov (UZB) by unanimous decision.
Flyweight
Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.
Catchweight 80kg
Seb Eubank (GBR) beat Emad Hanbali (SYR) KO round 1.
Lightweight
Mohammad Yahya (UAE) beat Ramadan Noaman (EGY) TKO round 2.
Lightweight
Alan Omer (GER) beat Reydon Romero (PHI) submission 1.
Welterweight
Juho Valamaa (FIN) beat Ahmed Labban (LEB) by unanimous decision.
Featherweight
Elias Boudegzdame (ALG) beat Austin Arnett (USA) by unanimous decision.
Super heavyweight
Maciej Sosnowski (POL) beat Ibrahim El Sawi (EGY) by submission round 1.
MATCH INFO
Real Madrid 2 (Benzema 13', Kroos 28')
Barcelona 1 (Mingueza 60')
Red card: Casemiro (Real Madrid)
BRAZIL SQUAD
Alisson (Liverpool), Daniel Fuzato (Roma), Ederson (Man City); Alex Sandro (Juventus), Danilo (Juventus), Eder Militao (Real Madrid), Emerson (Real Betis), Felipe (Atletico Madrid), Marquinhos (PSG), Renan Lodi (Atletico Madrid), Thiago Silva (PSG); Arthur (Barcelona), Casemiro (Real Madrid), Douglas Luiz (Aston Villa), Fabinho (Liverpool), Lucas Paqueta (AC Milan), Philippe Coutinho (Bayern Munich); David Neres (Ajax), Gabriel Jesus (Man City), Richarlison (Everton), Roberto Firmino (Liverpool), Rodrygo (Real Madrid), Willian (Chelsea).
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Rating: 1 out of 4
Running time: 81 minutes
Director: David Blue Garcia
Starring: Sarah Yarkin, Elsie Fisher, Mark Burnham
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5