United Arab Emirates Insurance Report Q1 2009
Business Monitor International, March 2009, Pages: 68
United Arab Emirates Insurance Report provides independent forecasts and competitive intelligence on United Arab Emirates's insurance industry.
We believe that the UAE will avoid an economic contraction in 2009 – but only just. Further negative news in the property market has shaken investor and consumer confidence, and growth in these two components of growth domestic product will drop considerably.
The coming year will be a difficult one for the UAE. We have revised down our growth forecasts once again on the back of a worsening export sector, weakness in the construction market, job losses and increased investor caution. It is possible that the country could fall into recession – defined as two consecutive quarters of negative growth – during the year, but this will be difficult to assess given the lack of quarterly data provided by the central bank. Overall, we believe that real GDP will grow by 1.0% in 2009, rising to a healthier 3.4% in 2010. Much of the worst news will come out of Dubai; this is the Emirate that is most closely integrated with the global economy and the one that has experienced the most rapid growth in recent years. Abu Dhabi has greater natural wealth thanks to its oil reserves, but economic weakness in Dubai will undoubtedly have some feed-through effects across all Emirates.
Once again, the property and construction market, particularly in Dubai, is integral to our view. Bad news has been emanating from the sector for several months, and we have previously highlighted before the likelihood of price falls in the residential sector in particular, due to oversupply and weakening investor confidence. What has changed during the last quarter is the stance of property developers. As recently as October or even November 2008, most major developers were insisting all their construction plans remained on track, saying that financing was not a problem and that they remained confident of finding buyers for all new projects. Since the last quarter, we have made two major changes to the data in this report. First, we have – to the greatest extent possible – incorporated hard figures that have been made available by the regulator(s) and trade association(s) in each country. In some cases, therefore, we have begun to include numbers that pertain to the development of the insurance sector through the early stages of the global financial crisis. Second, we have extended our forecasts out to 2013. In all cases, we have reviewed the key growth drivers – non-life penetration and life density – incorporated in our forecasts.
The global financial crisis is likely to affect the various segments of the global insurance industry in different ways. In many countries, especially in Europe, the coming recession points to softness in the nonlife segment. In many cases, numbers of policies may fall and there should be downwards pressure on premiums. By contrast, the main problem for the life segment in almost every country is the extreme volatility of financial markets. Over the longer term however, the fortunes of life insurance will likely recover thanks to the secular growth of organised savings in most countries. China – where the larger insurance companies continue to achieve double digit growth in premium income – is a good example of this. Some particular niches should also do well in the current environment, such as legal liability insurance. In the Middle East and North Africa, we profile 17 companies. These are: AGF, AIG, Allianz, Aviva, AXA, Cardif, ERGO, Eureko, Fortis, Generali, Groupama, HSBC Insurance, Liberty Mutual, MAPFRE, RSA, UNIQA, and Zurich Financial Services.
We also look at a number of the smaller local firms that are active in the region, particularly in Kuwait, Oman, Saudi Arabia and the UAE.
Our Insurance Business Environment Rating for UAE is 56.9.
The Sector At A Glance ...
Table: The UAE Insurance Sector At A Glance
Key Insights On The United Arab Emirates’ Insurance Sect
UAE Insurance Industry SWOT
Development of our Insurance Reports
Table: Selected European Countries: Projected Budget And Current Account, 2008 (as % of GDP)
Projections And Forec
Table: Insurance Data And Projections, 2006-2013
Projections And Drivers Of Growth
Table: Growth Drivers, 2005-2013
Country Update
Macroeconomic Outlook
Table: United Arab Emirates - Economic Activity
Political Outlook
Table: UAE Insurance Business Environment
Table: Middle East And Africa Insurance Business Environment Rankings
Regional Context
Table: Non-Life Premiums In A Regional Context, 2008
Table: Life Premiums In A Regional Context, 2008
Table: Comparison Of Major Lines As % Of Non-Life Premiums, 2006
Analysis Of Competitive Conditions
Regional Overview
Total: Overview Of Local Insurance Companies In The UAE, 2006 And 2007 (US$mn)
Table: Overview Of Local Insurance Companies In Kuwait, 2006 And 2007 (US$mn)
UAE – Non-Life Segment
UAE – Life Segment
Company Profiles
AGF
AIG
Allianz
Aviva
AXA
Cardif
Ergo
Eureko
Fortis
Generali
Groupama
HSBC Insurance
Liberty Mutual
MAPFRE
RSA
UNIQA
Zurich
Country Snapshot: UAE Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2000-2004
Table: Consumer Expenditure, 2000-2012 (US$)
Methodology
Basis Of Projections
Insurance Business Environment Rating
Table: Insurance Business Environment Indicators And Rationale
Table: Weighting Of Indicators
-AGF
-AIG
-Allianz
-Aviva
-AXA
-Cardif
-Ergo
-Eureko
-Fortis
-Generali
-Groupama
-HSBC Insurance
-Liberty Mutual
-MAPFRE
-RSA
-UNIQA
-Zurich
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