Insurance Authority: The number of companies is relatively large ... and merger reduces operating expenses

The Insurance Authority said that the number of insurance companies operating in the country is relatively large, and accordingly, the Authority believes that mergers between insurance companies will create strong financial entities, indicating that it is ready to provide assistance to companies wishing to merge and acquire, within what is permitted by the legal frameworks in force .

The authority told Emirates Today that the occurrence of the merger would reduce the operating expenses of the merged companies, and that the company resulting from the merger would benefit from the customer base of both merged companies.

Financial services

In detail, the Insurance Authority said that the insurance sector is one of the most important sectors of vital financial services in the state, and the number of insurance companies in the state is relatively large, and accordingly the Authority believes that mergers between insurance companies would enhance the principle of sustainability in insurance, and at the same time find Strong financial entities able to launch into and compete in global markets.

The Authority added: “We hope to see trends between the departments of insurance companies similar to those that occurred in the banking sector, since for any merger to take place there must be a (shared vision) between the two companies, i.e. there must be an incentive for them to expand in order to obtain a market share. "Greater, in preparation for launching to larger markets, and this (shared vision) must be aimed at creating added value."

offering help

And she added that, "When this desire becomes available to two companies, the insurance authority can always be used, which has indicated on many occasions its willingness to provide assistance to companies wishing to merge and acquire, within the frameworks permitted by the legal frameworks in force."

The Authority clarified that “the occurrence of the merger operations would reduce the operating expenses of the merged companies, and the benefit of the company resulting from the merger from the dealers’ base of both the merged companies and the stability of the insurance portfolios ”, noting that“ at the same time, the merger would increase the diversity of insurance products with the merged companies , And increase the company's ability, resulting from the merger, to retain a greater proportion of risks, rather than assigning the bulk of it to the global reinsurance markets. ”

Positive effect

She added that «all these matters will positively affect the level of service for the insured and the beneficiaries of insurance policies, and the insurance sector in general».

The authority stated that it “spared no effort on many occasions by announcing its readiness to provide assistance to companies wishing to merge and acquire, within the frameworks permitted by the legal frameworks in force”, pointing out that it is “ready, through its specialized cadres, to provide technical and legal advice to overcome all difficulties that Mergers and acquisitions are in short supply, ready to work with all official and government agencies and ask them to provide assistance to complete this. ”

The authority said that in April 2019, it issued the legal frameworks regulating acquisitions and control within the permitted ownership percentages within the country, which would regulate the acquisition process with the greatest degree of transparency and fairness.

According to the most recent data issued by the Insurance Authority, the number of insurance companies operating in the state has reached 62, of which 35 are national insurance companies and 27 are foreign insurance companies, while the number of companies that engage in all branches of insurance (personal insurance, money-making operations, property insurance and liability insurance) ), A total of 15 national companies and two foreign companies.

15 national companies

The number of companies that engage in property insurance and liability insurance branches is only 15 national companies and 17 foreign companies, and the number of insurance companies that engage in people insurance and money-making operations only 3 national companies and 9 foreign companies, while the number of companies that engage in export credit insurance is one national company and a number Takaful insurance companies, which are all national companies, are 12 companies.

Insurance Authority: Providing assistance to companies wishing to merge and acquire.