UAE – Mergers are the solution for distressed insurers
Monday, 08 29 2016, Category: Insurance and Reinsurance, Country: U.A.E
There is an urgent need for insurance companies operating in the country to enter mergers and acquisitions operations after the series of losses that affected the insurance sector during the past years. There are indeed more than 20 insurance and reinsurance companies that suffered from different levels of losses during the year 2015.
Insurance decision makers said that there are exclusively two unique options in light of the underpricing policies practiced by insurers especially in motor, health and personal insurance. Continuing this unhealthy competition and charging lower prices at the expense of quality and service will lead to increased risks and losses. These effects are proven in the quarterly, half-yearly and annual figures of insurance companies, which suffered from losses. The second option is mergers and acquisitions between small and medium-sized companies, which cannot compete with larger companies in order to save some companies from these undisciplined practices.
Source: Al Khaleej