Q1. Can you share a brief overview of your professional journey in the insurance industry, leading up to your role as Secretary General at Emirates Insurance Association and Gulf Insurance Federation?
A ‘brief overview’ of aprolific and cherished 43-year career? That is quite a challenge indeed!
Following my graduation with a Bachelor of Arts in Economics and Marketing Management from Oglethorpe University, Atlanta, USA in 1981, I embarked on a dynamic career journey which began as a graduate trainee at ARIG (Arab Insurance Group), where I took the opportunity to immerse myself in the intricacies of the insurance industry.
During the years 1981 to 1996, I was privileged to be part of the team at ARIG. Throughout my tenure, I prioritized building and nurturing relationships with industry stakeholders, fostering a network that has proven invaluable over the years.
After many years of international travel and assignment with ARIG in Bahrain and London, I returned to the UAE as Director and CEO of Alliance Insurance Company, a national company, and then set out as the developing consultant of a new organisation, Aman, Dubai Islamic Insurance and Reinsurance Company. I established the company then began my role as General Manager. Later, I saw it grow to success as General Advisor. After this project I was drafted into the dual position of Secretary General of the Emirates Insurance Association and Secretary General of the GCC Insurance Commission a position I hold today along with consulting on insurance matters for several entities across the UAE.
In 2021 I was awarded INSURETEK’s Lifetime Achievement Award – Excellence in Leadership. Awarded the Middle East Insurance Industry Review’s Personality of the Year award at the inaugural Middle East Insurance Industry Awards in 2014, Mena Insurance Review’s 2013 Power 50 which showcases the 50 people who wield the most power in the MENA Insurance market. In 2012, awarded the INSUREX Achievement Award of the Year and a number of other accolades for services across the industry of which I’ve been humbly honoured.
I write, speak, and present regularly across the region. As a keynote speaker, host, lecturer, moderator, chair and participant at numerous insurance related seminars, conferences, and summits throughout the UAE, GCC, MENA regions, and internationally including Europe, United States, and the Far East.
Q2. How have you witnessed the insurance industry evolve in the Gulf region?
During the period of British influence in the Arabian Gulf, insurance was not yet established in the region, with each emirate governed by its own laws. British interests were protected through British companies, with Gray McKenzie reportedly undertaking insurance directly with these entities. The introduction of insurance began with The Oriental Insurance Company opening a branch in Dubai in 1959, primarily serving Indian businessmen. Subsequently, in 1962, the Arabia Insurance Company expanded its operations to Dubai and Abu Dhabi. Other companies, including the Kuwait Insurance Company, followed suit, with the first local insurance company, Sharjah Insurance & Reinsurance Company, established in Sharjah in March 1970, partly owned by the Sharjah Government. In October of the same year, Dubai Insurance Company was incorporated by a group of individuals and businessmen in Dubai.
Following the formation of the United Arab Emirates, both federal and local governments encouraged the establishment of new insurance companies, with a focus on national entities. The governments mandated the placement of insurance business solely with national companies, a policy supported by the chambers of commerce and industry in each emirate. By the end of 1984, there were 17 national insurance companies operating in the UAE, marking a significant expansion of the insurance sector in the country.
Since then, the GCC region has witnessed a significant upsurge in merger and acquisition (M&A) activities within the insurance sector. While there have been a few instances of cross-border acquisitions, the predominant trend has been intra-regional deals, with companies seeking to consolidate their operations to counteract challenges in profitability.
Driven by high operating costs and a tightening regulatory landscape, the insurance sector in the GCC is increasingly moving towards consolidation
As a result, numerous opportunities are emerging for larger operators to identify and acquire smaller firms with solid solvency capital, thereby expanding their market share and enhancing their business footprint.
Q3. What challenges do insurance companies in the Gulf face currently, and how are they addressing these challenges?
The insurance sector in the GCC region faces several formidable challenges, exacerbating the complexities of an already competitive market. Intense competition prevails, hindering the application of proper rates and squeezing profit margins for insurers.
Further compounding these challenges are issues of inefficient claims management and a rising tide of fraudulent activities, particularly in tandem with the increasing prevalence of expensive cars on the roads.
Moreover, the adoption of IFRS 17 by GCC insurers in January 2023 introduces a new layer of complexity, necessitating substantial changes in existing processes. This, coupled with heightened capital requirements, poses significant challenges, particularly for medium-sized insurers with limited resources.
Rising claims inflation and tax rates present additional hurdles, particularly in maintaining profitability amidst increasing tax burdens. Furthermore, heavy reliance on reinsurance exposes GCC insurers to risks associated with a hardening reinsurance market. Despite these challenges, key trends such as digital transformation, M&A activities, and the emergence of new insurance products like cyber insurance and credit insurance signify opportunities for growth and innovation within the GCC insurance landscape.
Q4. What do you see as the key drivers of growth in the Gulf insurance sector?
The GCC insurance industry has experienced consistent growth in recent years, propelled by economic resurgence following the COVID-19 slowdown and successful implementations of mandatory health and motor insurance across GCC countries. This upward trajectory is expected to continue, supported by sustained economic diversification efforts, population expansion, and significant infrastructure development in the region. Moreover, the industry is witnessing a rise in Merger & Acquisition (M&A) activities, offering opportunities for traditional and Takaful companies to diversify and collaborate with Insurtech firms, driving innovation and bolstering profitability. Government initiatives aimed at enhancing medical coverage and reinforcing regulatory frameworks are poised to further catalyze industry growth.
Projections indicate that the GCC insurance market is set to grow at a Compound Annual Growth Rate (CAGR) of 5.3%, reaching US$44.4 billion by 2028 from US$34.3 billion in 2023.
The GCC insurance market benefits from favorable demographics, with a rising population projected to reach 63.4 million by 2028, predominantly comprising young and working-age individuals. Mandatory health insurance requirements for citizens, expatriates, and visitors contribute to increased demand for insurance products, while policies mandating insurance coverage for tourists in select GCC countries further drive demand for travel health insurance. Overall, the GCC insurance industry is poised for sustained growth, underpinned by economic resilience, regulatory enhancements, and evolving consumer demands.
Q5. Can you highlight some of the key initiatives undertaken by the Emirates Insurance Association and Gulf Insurance Federation for development of the Insurance sector in recent years?
The Emirates Insurance Association, established in 1988, along with the Gulf Insurance Federation formed in 1993, play crucial roles in harmonizing insurance activities in the region. Their objectives include fostering cooperation among member insurance entities, agents, brokers, and the insured public. Over the years, these organizations have significantly contributed to the development of a unified insurance market, providing recommendations and guidance to regulatory authorities based on scientific principles to safeguard the interests of policyholders.
The UAE insurance market, one of the largest in the Arab world and second in the GCC after Saudi Arabia, has witnessed exponential growth in income and investments alongside economic expansion. National and international insurance companies have flourished in this favourable environment.
The primary objectives of these associations involve studying technical aspects of insurance activities, proposing standard policies, and facilitating training programs to enhance industry professionalism. Collaborative efforts with educational institutions like the Higher College of Technology and the Emirates Institute of Banking and Finance, alongside counterparts in other GCC countries, aim to bolster human capital within the insurance sector.
Continuous amendments to regulations, guided by consultations with regulatory authorities across the GCC, aim to elevate professional standards and ensure market integrity. The establishment of independent regulatory bodies, such as insurance commissions, is advocated to uphold ethical practices and compliance with local regulations.
Furthermore, there is a call for stricter control to uphold core underwriting principles and maintain solvency margins within the industry. Emphasis is placed on developing individual life insurance products to cater to the affluent population of the GCC region, while also promoting awareness of Takaful (Islamic Insurance) offerings, which have seen remarkable growth and recognition globally.
In summary, the concerted efforts of industry associations, regulatory bodies, and educational institutions aim to foster a robust and ethical insurance sector in the GCC, capable of meeting the diverse needs of its growing population and contributing to economic development.
Q6. How is the insurance industry in the Gulf embracing digital transformation, and what impact do you foresee in terms of customer experience and operational efficiency?
In our rapidly evolving digital world, customer expectations have shifted towards seamless digital experiences across all aspects of life, including interactions with insurers. This underscores the imperative for the future of insurance to embrace digital transformation fully. Insurers who fail to adapt risk losing customers to competitors offering more innovative and digitally driven products and services.
Data and technology adaptation are now essential for insurers and the reinsurance industry alike. Data plays a critical role in strategy development, enterprise risk management (ERM), product innovation, portfolio management, underwriting, claims management, and pricing. In the Middle East, data quality is particularly relevant for solvency calculations based on economic capital, as recognized by regulators and rating agencies.
The digitization of insurance products and services is increasingly becoming a competitive differentiator, driving a digital revolution in the industry. Technological disruptions are reshaping traditional insurance business models, assumptions, and practices. Insurers must embrace digital transformation not only to improve operational efficiency but also to enhance customer relationships and foster growth.
In response to market realities, insurers are gradually adopting digital applications to meet the demands of time-poor consumers who prioritize convenience. Despite inherent structural barriers and heavy regulations, the insurance industry is gradually leveraging technology-based solutions to soften the impact of the pandemic and penetrate new business areas.
The rise of Insurtech (Insurance Technology) is revolutionizing the insurance value chain, offering innovative solutions to enhance efficiency and customer experience. Collaboration between traditional insurers and technology providers is on the rise, with a significant portion of insurers keen to explore partnerships with Insurtech firms.
In the GCC countries, the increased utilization of digital applications in both conventional and Takaful insurance industries is driving long-term growth. Technological advancements are reshaping the financial system, including the Islamic financial system. Insurers are increasingly focusing on automation to improve efficiency, reduce costs, detect fraud, and enhance customer satisfaction.
Artificial Intelligence (AI) is playing a pivotal role in reshaping the insurance landscape, optimizing management costs, improving rates, reducing errors, and enhancing risk forecasting. While automation offers numerous benefits, concerns about maintaining human contact and potential risks associated with AI implementation must be addressed.
Despite the pressure to innovate, some insurers in the Middle East have yet to establish a robust digital infrastructure. However, industry leaders who have invested in digital processes and systems are well-positioned to seize opportunities created by new technologies and changing customer behaviours.
In conclusion, the future of insurance lies in embracing digital transformation fully. By leveraging data, technology, and innovative solutions, insurers can enhance operational efficiency, improve customer experiences, and position themselves for long-term success in an increasingly competitive landscape.
Q7. In what ways do the Emirates Insurance Association and Gulf Insurance Federation foster collaboration among industry players, both regionally and internationally?
Through participation in conferences, seminars, and the establishment of Memorandums of Understanding (MOUs) with each association and federation across GCC countries, insurers in the region foster collaboration and knowledge-sharing. Membership in organizations like the General Arab Insurance Federation (GAIF) and the Federation of Afro-Asian Insurers and Reinsurers (FAIR) further strengthens ties within the insurance community and facilitates cooperation on regional and international levels.
Moreover, insurers engage in collaborative efforts with authorities and federations both regionally and internationally to address common challenges and promote industry best practices. This includes partnerships with organizations such as the International Association of Insurance Supervisors (IAIS) to ensure compliance with global standards and regulations.
By actively participating in these initiatives and maintaining close relationships with various industry stakeholders, insurers in the GCC region enhance their collective knowledge, strengthen regulatory compliance, and contribute to the overall growth and development of the insurance sector.
Q8. How is the insurance industry in the Gulf addressing sustainability and environmental, social, and governance (ESG) considerations?
Moving forward, the Central Bank of the UAE (CBUAE) remains steadfast in its commitment to sustainability and sustainable finance, aligning with global initiatives such as COP28 and the ‘Year of Sustainability’ in the UAE. The CBUAE is actively working on policy initiatives to reflect this commitment, alongside implementing comprehensive sustainability programs aimed at significantly reducing its carbon footprint.
To facilitate and monitor this transformation, the CBUAE has adopted a progressive medium-term strategy with ambitious annual targets and global benchmarks. Key strategic objectives include ensuring compliance with international standards across all functional areas, driving digital technology adoption within the financial sector, strengthening partnerships with central banks and international bodies, and integrating sustainability into policy mandates and operations.
In 2022, the CBUAE intensified sustainable finance initiatives, enhanced surveillance of the UAE financial system’s resilience and vulnerabilities, and sharpened focus on Environmental, Social, and Governance (ESG) risks in financial institutions. The CBUAE conducts thorough surveillance of sustainability factors in financial markets and institutions, identifying ESG risks and opportunities in comparison to international benchmarks and best practices.
Furthermore, the CBUAE maintains exposures to ESG financial assets in reserve management policies, with a focus on green and sustainable instruments that comply with risk parameters. Looking ahead, sustainability criteria will be further embedded in strategic asset allocation, with ongoing efforts to facilitate climate-risk stress testing capabilities and enhance risk mitigation measures.
In the insurance sector, the CBUAE assesses climate change risks and opportunities, focusing on risk mitigation measures and adaptation strategies associated with the sustainability transition. The CBUAE remains committed to addressing climate change and promoting sustainable practices across the banking, insurance, and financial services sectors in the UAE.
Q9. How Risk Management has evolved in the Gulf region over the years and how the industry is embracing the risk management culture.
In 2022, the Central Bank of the UAE (CBUAE) demonstrated its commitment to enhancing trust and confidence in the UAE’s financial services sector through the adoption of leading international standards and practices in internal risk management and compliance. Several significant milestones were achieved, strengthening the CBUAE’s risk and governance frameworks and practices.
The issuance of regulations and standards in various areas underscores the CBUAE’s dedication to promoting sound risk management practices.
The Corporate Governance Regulation outlines core duties and responsibilities for insurance company boards and senior management, emphasizing the importance of internal structures and processes. Similarly, the Risk Management and Internal Controls Regulation establishes requirements for risk oversight, compliance, and internal audit functions within insurance companies. Key roles such as Chief Risk Officer, Head of Compliance, and Head of Internal Audit are given prominence and subject to CBUAE approval.
Overall, these regulations aim to enhance governance and risk management culture within the insurance sector, holding boards and senior management accountable for maintaining robust risk management practices and ensuring financial stability and integrity within the industry.
Q10. Given the increasing concerns around climate change, how can the insurance industry enhance its resilience and contribute to climate adaptation efforts?
The insurance industry is uniquely positioned to address the challenges posed by climate change and contribute to building a more resilient society and economy. One-way insurers can make a meaningful impact is by developing innovative insurance products that incentivize climate-related risk prevention. For example, insurers can offer lower premiums to policyholders who implement climate adaptation measures, such as installing anti-flood doors or early warning systems.
By encouraging policyholders to take proactive steps to mitigate climate-related risks, insurers not only reduce the policyholder’s physical risk exposures and insured losses but also help bridge the climate-related insurance protection gap. This protection gap refers to the disparity between the actual losses incurred due to climate-related events and the portion of these losses covered by insurance.
Given the increasing frequency and severity of weather-related disasters, such as floods and cyclones, insurers must adapt to evolving environmental realities. While the lack of historical data in some regions presents challenges, insurers are leveraging analytical tools to forecast how climate change will impact different regions and anticipate potential outcomes.
As weather-related losses continue to test insurers’ risk management capabilities, it becomes imperative for the insurance industry to develop expertise in understanding key exposures and adapting to changing market dynamics. Moreover, disruptions caused by meteorological and climate-related extremes necessitate ongoing adjustments in insurance terms, exclusions, and regulatory frameworks to effectively address emerging risks.
In conclusion, by proactively incentivizing climate-related risk prevention measures and adapting to changing environmental realities, the insurance industry can play a pivotal role in promoting climate resilience and ensuring the availability of insurance coverage against climate-related hazards.
Q11. Are there specific innovations or trends that you believe will redefine the Gulf insurance landscape?
The insurance industry in the GCC region is experiencing a paradigm shift driven by five key trends. Firstly, the GCC has emerged as an early adopter of global digital transformation initiatives.
Secondly, there has been a noticeable surge in mergers and acquisitions (M&A) within the GCC insurance sector.
Thirdly, governments across the GCC are prioritizing personal data protection in response to escalating cyber threats.
Furthermore, there is a notable rise in the demand for credit insurance in the region, driven by the complexities of global trade and economic uncertainties.
Overall, the insurance industry in the GCC is undergoing significant transformation, fuelled by favourable demographics, robust economic factors, and the implementation of mandatory health insurance schemes.
Q12. As we conclude, is there any message or advice you would like to share with the readers of The Insurance Times. Thank you for taking the time to share your insights and experiences with our readers.
As we come to a close, I would like to extend a message of resilience and adaptability to the readers of The Insurance Times. In the dynamic landscape of the insurance industry, it’s crucial for professionals to remain agile and proactive in navigating the ever-evolving challenges and opportunities.
Embracing innovation and technological advancements is paramount in staying ahead of the curve.
Furthermore, fostering a culture of collaboration and knowledge-sharing is essential for fostering growth and innovation in the insurance sector.
Lastly, I urge readers to prioritize sustainability and resilience in their business practices. As climate change and other global challenges continue to reshape the risk landscape, integrating sustainable and environmentally conscious strategies into insurance operations is not only a moral imperative but also a strategic necessity for long-term success.
In closing, I extend my gratitude to The Insurance Times for providing a platform for industry dialogue and knowledge exchange. Together, let us continue to adapt, innovate, and drive positive change in the dynamic world of insurance.
