UAE – Mergers to create competitive insurers
Thursday, 03 23 2017, Category: Insurance and Reinsurance, Country: U.A.E
Insurance sector experts in the UAE agreed that mergers and acquisitions are an inevitable necessity given the large pressures on profits despite the continuous growth rates in premiums. Additionally there is a large gap between large companies capable of competing and attracting customers and small companies that fight for survival by decreasing prices.
All of these factor contribute to additional pressure on profits. Lately the news say that some companies move toward mergers and acquisitions in order to create large entities, which are able to compete.
Small companies rely on underpricing in order attract new customers and achieve a larger market share even though this practice leads to losses. Therefore, a larger customer base will help recover profitability. As a matter of fact 13 insurers out of 30 insurers are listed in the financial markets of Dubai and Abu Dhabi.
Source: Al Bayan - UAE