UAE – Ins. Authority: The number of companies is relatively large
Monday, 03 09 2020, Category: Insurance and Reinsurance, Country: U.A.E
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.
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."
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. ”
Source: Teller Report