Class Review United Arab Emirates - www.lloyds.com/UAEMI February 2015
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Class Review United Arab Emirates www.lloyds.com/UAEMI February 2015 filip.wuebbeler@lloyds.com
Key Contacts
Filip Wuebbeler, Global Markets,
Market Intelligence
Telephone: 020 7327 6209
filip.wuebbeler@lloyds.com
Chris Brown, Global Markets
Telephone: 020 7327 5731
chris.brown@lloyds.com
Disclaimer
This document is confidential and provided by Lloyd's to Lloyd's managing agents subject to the
conditions that the document is used for internal purposes only and that it is not made available to any
third party without the expressed written consent of Lloyd's. This document contains third party
proprietary material and any unauthorised disclosure by a Lloyd's managing agent may cause Lloyd's to
be in breach of its obligations as an authorised licensee of such material. This document is intended for
general information purposes only. Whilst all care has been taken to ensure the accuracy of the
information Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not
accept any responsibility or liability for any loss to any person acting or refraining from action as a result
of, but not limited, any statement, fact, figure, expression of opinion or belief contained in this document.
© Lloyd’s1 Introduction IN THIS SECTION 1.1 Content 1.2 Foreword 1.3 Executive Summary 1.4 About Class Review 1.5 Methodology 3 © Lloyd’s
1. Introduction
1.1 Content
1. Introduction 3
Content 4
Foreword 5
About Class Review 7
Methodology 8
2. Key themes 13
Key local market statistics 14
Key Lloyd’s statistics 16
Market players 20
Distribution 22
Regulation 23
Takaful trends 25
Reinsurance 26
3. Motor 28
4. MAT 32
5. Property 39
7. Pecuniary Loss 46
8. General Liability 49
9. A&H 55
10. Freight 61
11. Other 64
12. Lloyd’s High Level Classes 67
12. Appendix 77
4 © Lloyd’s1. Introduction
1.2 Foreword
A diverse region with strong growth fundamentals
The Gulf States are transforming and diversifying their economies facilitated by
unprecedented income from energy exports. Extensive infrastructure investments,
growing populations and incomes, more stringent and sophisticated regulation are
just a few factors that are expected to propel the region’s insurance industry.
The potential for growth in premiums for the region becomes particularly apparent
when current levels of premium density and penetration are compared with other
emerging markets. At the same time, low capitalisation of local risk carriers
implies that there is a considerable role to be played by international (re)insurers.
The Gulf region is a mixture of some rich & some poorer economies,
accordingly, insurance density and penetration vary significantly.
In the last 10 years, insurance industry in the Gulf Cooperation Council (GCC) has
experienced steady growth on the back of economic development,
population expansion, improved regulatory environment, and increased
product awareness. The major force behind the industry’s strength in recent
years has been the implementation of compulsory health insurance schemes
in various jurisdictions.
Despite past performance, the sector is still relatively underdeveloped and key
market indicators trail the world average by a large margin. However, it continues
to evolve, and strength of fundamental industry drivers suggests solid growth
prospects.
Demographic factors such as an expanding population base, large
representation of foreigners, and increasing life expectancy are expected to
have a positive impact on demand of insurance products in the Gulf. Furthermore,
natural occurrences like the floods in Saudi Arabia in 2009 and 2011 and
cyclones such as Gonu (2007) and Phet (2010) in Oman, have prompted more
businesses to insure themselves against such risks.
Notes: Soft intelligence based on a number of publicly available sources
5 Source: KPMG, Lloyd’s, ITIJ Article, Business Monitor International © Lloyd’s1. Introduction
1.2 Foreword
The UAE lies at the heart of the region’s insurance markets
The United Arab Emirates (UAE) is the second largest insurance market in
the GCC region behind Saudi Arabia. The global financial crisis had a substantial
impact on the property and motor insurance industries; however, with the economy
strengthening, it brings significant potential to the personal and commercial lines
markets.
The UAE has over 60 firms offering conventional and Islamic insurance, also
known as Takaful, and is the largest reinsurance market in the GCC, as
cession rates are over twice those in Saudi Arabia. More importantly, the Dubai
International Financial Centre (DIFC) aims to be an ‘offshore capital market’ to
encourage initiatives from around the financial services sector. The centre was
conceived by Crown Prince Sheikh Mohammed Bin Rashid Al Maktoum and
the government of Dubai as part of their plan to further economic development,
growth and progress in the UAE and the wider region. The DIFC aims to bridge
the time gap between the financial centres of Hong Kong and London, and
services a region with what the authorities believe to be the largest untapped
emerging market for financial services. With respect to insurance, the centre’s aim
is to provide ‘wholesale’ (i.e. reinsurance) services to the UAE and the
region at large. Advantages of exemption from ‘onshore‘ licensing requirements,
a bespoke legal and regulatory framework, proximity to regional markets and the
guarantee of 100% foreign ownership are some of the attractions that the DIFC
has to offer foreign insurance interests intent on entering the region. A key
characteristic of the DIFC is that entities registering there will be exempt from the
majority of ‘onshore’ UAE legislation. The DIFC has its own governing
authority, laws, regulator and court.
LLOYD’S IS OPENING IN THE DIFC IN MARCH 2015
Lloyd’s has announced that Mark Cooper has been appointed as the market’s
first Country Manager for Dubai in November 2014. Mark will head up Lloyd’s
new operation in the DIFC, managing the platform and supporting managing
agents in developing their business across Gulf countries and the wider Middle
East and North Africa region. The following Lloyd’s Service Companies have
signed up to the Lloyd’s platform that will open in March 2015:
Amlin, Argo, Liberty, Markel, Pembroke, Talbot, Watkins
Notes: Soft intelligence based on a number of publicly available sources
6 Source: KPMG, Lloyd’s, ITIJ Article, Business Monitor International © Lloyd’s1. Introduction
1.2 Foreword
The UAE’s insurance market is growing by around 10% annually
As investments in the real estate sector continue to rise, it boosts the need for
insurance coverage. Motor insurance is also thriving in the UAE due to the
high levels of vehicle ownership and continued growth in the automobile
sector. The most important impetus to insurance premium growth has come from
the growth of medical insurance. This growth is largely resulting from medical
insurance being made compulsory by a change in regulation in Dubai as well as
Abu Dhabi.
It was recently reported that the UAE’s insurance market is likely to grow by at
least 10% in 2014. A large proportion of this growth is being attributed to the
expansion of the national economy and a healthy flow of foreign investment. It
was also suggested in a report by the Al Khaleej newspaper that, following the
issuance of new legislation and growth-promoting regulations, the UAE insurance
sector could be on the verge of a new phase of development.
The UAE has a small, wealthy population, no history of terrorism, and no
sectarian tensions to speak of. Notably, Dubai has established itself as a major
worldwide tourist destination in just over a decade. Heavy oil-funded spending on
security and social benefits support high growth rates in a stable environment.
KEY INSURANCE MARKET FACTS
The UAE market is mostly broker-driven;
Small to medium insurers, with limited capital and number of years of
operations in the market, highly depend on brokers for initiating the
relationship with foreign reinsurers;
Non-life business concluded through bancassurance arrangements is a
growing business in the UAE market, accounting for between 5%- 10% of
general insurance business written; and
Dubai and Abu Dhabi dominate the UAE insurance market, generating
over 85% of premiums.
Even though the overall size of the market has increased, insurance products in
the UAE and the GCC at large have continued to experience extremely
competitive rates when compared to international markets, especially on risks
with a low probable maximum loss (PML).
Notes: Soft intelligence based on a number of publicly available sources
7 Source: KPMG, Lloyd’s, ITIJ Article, Business Monitor International © Lloyd’s1. Introduction
1.3 About Class Review
1.3.1 To whom is Class Review targeted?
Class Review offers benchmarking statistics comparing Lloyd’s business with its
competitors (where available) in key territories, broken down by class of business.
Key audience of this report are:
Managing agents and corporation staff;
Brokers;
Coverholders.
There are two versions of this report, one for managing agents (password
protected) and one version for brokers and coverholders (publicly available). The
password-protected version contains Lloyd’s incurred loss ratios. Loss ratios are
omitted in the managing agent version, where fewer than 6 syndicates write that
class.
These reports have been developed in collaboration with the Lloyd’s market and
are designed to facilitate international business development.
1.3.2 What can I find in this Class Review?
This report is organised along the OECD classes (see page on Mapping in this
Appendix at 12.1) and includes the following sections:
1. Lloyd’s & local market context
2. Lloyd’s statistics* (* loss ratios are for Lloyd’s managing agents only)
3. Local market statistics (dependent on available data set)
4. Soft intelligence (opportunity matrix and/or commentary for key classes only)
Notes: As per latest Market Intelligence Class Review structure
8 Source: Market Intelligence, (January 2015) © Lloyd’s1. Introduction
1.4 Methodology
1.4.1 Key definitions for local market figures
The Direct Premiums in this report are unspecified.
Claims are defined as Incurred Claims.
Claims Ratios used in this report are calculated internally using the method
below.
Please view the website for further detail and analysis
> http://www.ia.gov.ae
1.4.2 Calculations for local market figures
Incurred Claims Gross Incurred Claims
Ratio =
Gross Written Premiums
Calendar Year
Notes: As per latest Market Intelligence Class Review structure
9 Source: Market Intelligence, (January 2015) © Lloyd’s1. Introduction
1.4 Methodology
1.4.3 Key definitions for Lloyd’s figures
The Lloyd’s premium and claims data is sourced from Xchanging. Lloyd’s
business in this market is analysed using Gross Signed Premium (GSP) and
incurred claims on a country of origin basis.
The Gross Signed Premium used in this report are gross of reinsurance and
acquisition fees (brokerage and commission) and represent the cash flow that
has been processed by Xchanging during the calendar year.
Incurred claims include paid claims and outstanding claims, which is an
estimate of the amount of reserves needed to pay the claims, including indemnity
and fees and expenses.
Incurred claims on a calendar year basis are calculated as follows: losses
incurred during the period plus outstanding losses at the end of the period
minus outstanding losses at the beginning of the period. Incurred claims on a
year of account basis are calculated as follows: losses incurred during the period
plus outstanding losses at the end of the period. The Incurred Loss Ratios are
calculated on a year of account basis over a six year development period, by
dividing the incurred losses (as calculated above) by the sum of premiums during
the period. The Incurred Loss Ratios do not include Incurred But Not Reported
(IBNR) losses.
Incurred loss ratios for Lloyd’s are omitted for classes where less than 6
syndicates write business.
1.4.4 Calculations for Lloyd’s figures
Incurred Losses
(Paid Claims + outstanding claims at the end of period – outstanding claims at the
Incurred Claims beginning of the period)
Ratio =
Gross Signed Premium
Calendar Year
Incurred Losses
(Sum of Paid Claims + outstanding claims at the end of period)
Incurred Claims
Ratio =
Sum of Gross Signed Premium for the period
Year of Account
Calendar Year: Takes into account the premiums and claims paid from 1st Jan until the 31st Dec of the year when the
contract started. Year of Account: Takes into account the premiums as paid and allocated to the year of the policy
inception.
Notes: As per latest Market Intelligence Class Review structure
10 Source: Market Intelligence, (January 2015); Xchanging data, (2015) © Lloyd’s1. Introduction
1.4 Methodology
1.4.5 Compare Countries statistics available for all
The underlying market & Lloyd’s premium figures shown in this report are
available within the Market Intelligence “Compare Countries” product:
www.lloyds.com/CompareCountries
This tool provides high level statistics across over 200 territories on the economy,
insurance market and Lloyd's business. Please note, that there are 2 versions
available for this too on the website. Publicly available version and a managing
agent version, that contains more granular Lloyd’s premium data by class of
business. This version is password-protected.
Please contact marketintelligence@lloyds.com to request your password.
ABOUT THE INSURANCE MARKET DATA:
DATA COLLECTION: The Market Intelligence team collects insurance and
reinsurance premium volume data from local regulators around the world.
Regulators typically report data according local class of business classifications.
The Market Intelligence team maps from these classes to common classes
(A&H, Freight, etc.) reported in this sheet to enable some degree of comparison
across countries. These mappings follow as closely as possible the definitions
in the "OECD Class Definitions" tab of this file. However, the strict comparability
of data across countries will vary and such cross-country comparisons should
be done with caution.
ADJUSTMENTS: No adjustments are made to account for inflation or FX
changes; all insurance and reinsurance premium data is reported in nominal
terms (a.k.a current prices).
FORECASTING: The Market Intelligence team provides basic forecasts on
insurance and reinsurance premiums. These assume constant penetration rate
and constant cession rates (from the latest available actual data). The premium
growth rate simply tracks the nominal GDP growth forecast provided by the IMF.
To extend the series to 2025, IMF forecasts for the latest available year
(currently 2019) are extrapolated through to 2025.
Notes: Market Intelligence methodology, January 2015
11 Source: See further details at: www.lloyds.com/CompareCountries © Lloyd’s1. Introduction
1.4 Methodology
1.4.6 Managing Agent Compare Countries available in MI Portal
Managing agents have access to tailored data including Lloyd’s incurred loss
ratios used in this report.
www.lloyds.com/MIPortal
This tool is being launched to managing agents in Q1 2015. It provides high level
statistics across over 200 territories on the economy, insurance market and
detailed premium and incurred loss ratio statistics for Lloyd's business.
Furthermore, managing agents can view their own data versus Lloyd’s total to
perform an in depth benchmarking analysis.
Managing agents can download a User Guide on how to get access to their
Managing Agent Compare Countries tool via the MI Portal.
Please view www.lloyds.com/MIPortal
> download “Compare Countries user guide”
ABOUT THE DETAILED LLOYD’S DATA:
DATA LIMITATIONS: Premiums & Loss Ratios will only be shared for cuts
where more than 9 Syndicates write business, premium is greater than US$ 1m
and the largest syndicate does not write more than 50% of that cut.
Notes: Market Intelligence methodology, January 2015
12 Source: See further details at: www.lloyds.com/CompareCountries © Lloyd’s2 Key Themes IN THIS SECTION 2.1 Key local market statistics 2.2 Key Lloyd’s statistics 2.3 Market Players 2.4 Distribution Channels 13 © Lloyd’s
2. Key themes
2.1 Key local market statistics
2.1.1 Market premiums by OECD class 2009-2013
Insurance premiums
Premiums in US$ m
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2009 2010 2011 2012 2013
A&H 1,120 1,351 1,538 1,770 2,696
Freight 0 0 0 0 0
General Liability 2,129 2,167 2,164 2,177 2,009
Long Term Business 0 0 0 0 0
MAT 551 609 635 632 466
Motor 0 0 0 0 0
Other Non-Life 184 161 215 295 356
Pecuniary Loss 0 0 0 0 0
Property 582 617 684 659 594
NOTE: Please view Appendix 11.1 for a detailed mapping of local market
classes into the common OECD mappings.
Notes: Market Intelligence based on local data
14 Source: IA, (January 2015), http://www.ia.gov.ae © Lloyd’s2. Key themes
2.1 Key local market statistics
2.1.2 Market – by OECD Class (insurance business only)
Insurance premiums and loss ratios
Premiums US$ and Loss Ratios %
Size of the Market Performance
2009-13
2009-13 2009-13 2009-13 2013
Absolute
Premium Trend CAGR Cumulative ILR ILR
Growth
2013 6,119.3
2012 5,531.9 +1,554.0 +8%
TOTAL 2011 5,236.1 58% 64%
2010 4,905.7
2009 4,565.4
2013 2,695.6
2012 1,769.8 +1,575.7 +25%
A&H 2011 1,537.5 73% 73%
2010 1,351.0
2009 1,119.9
2013 -
2012 - - -
Freight 2011 -
-
- -
2010 -
2009 -
2013 2,008.6
2012 2,176.6 -120.1 -1%
General Liability 2011 2,163.9 53% 66%
2010 2,166.8
2009 2,128.7
2013 -
2012 - - -
Long Term Business 2011 -
-
- -
2010 -
2009 -
2013 465.8
2012 632.1 -85.5 -4%
MAT 2011 635.2 32% 32%
2010 609.4
2009 551.3
2013 -
2012 - - -
Motor 2011 -
-
- -
2010 -
2009 -
2013 355.6
2012 294.7 +172.0 +18%
Other Non-Life 2011 215.0 63% 65%
2010 161.2
2009 183.6
2013 -
2012 - - -
Pecuniary Loss 2011 -
-
- -
2010 -
2009 -
2013 593.8
2012 658.7 +11.9 +1%
Property 2011 684.5 58% 43%
2010 617.4
2009 581.8
Notes: Market Intelligence based on local data; ILR = incurred loss ratios. ILRs only available when
reported by the regulator
15 Source: IA, (January 2015), http://www.ia.gov.ae © Lloyd’s2. Key themes
2.2 Key Lloyd’s statistics
2.2.1 Lloyd’s premiums by OECD class 2008-2013
Gross Signed Premium (US$ m)
250
200
150
100
50
0
2008 2009 2010 2011 2012 2013
A&H 8 10 11 16 26 11
Freight 18 17 16 17 19 19
General Liability 18 21 18 17 17 17
Long Term Business 0 1 1 2 1 2
MAT 58 64 68 91 70 77
Motor 7 12 20 14 9 12
Other Non-Life 0 0 0 0 0 0
Pecuniary Loss 1 2 3 3 2 2
Property 29 42 46 39 47 44
NOTE: Please view Appendix 11.1 for a detailed mapping of Risk Codes,
Lloyd’s High Level Classes & common OECD mappings.
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
16 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s2. Key themes
2.2 Key Lloyd’s statistics
2.2.2 Lloyd’s total premiums 2008-2013
Gross Signed Premium (US$ m)
Calendar Year
Direct Reinsurance
250
200
150
100
50
0
2008 2009 2010 2011 2012 2013
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
17 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s2. Key themes
2.2 Key Lloyd’s statistics
2.2.3 Lloyd’s – by High Level Class
Gross Signed Premium (US$ m) by High Level category; premium & loss ratio developments
Size of the Market
2009-13
2009-13 2009-13
Absolute
Premium Trend CAGR
Growth
2013 183.9
2012 190.6 +14.8 +2%
TOTAL 2011 197.8
2010 183.9
2009 169.1
2013 14.1
2012 27.7 +1.7 +3%
Accident & Health 2011 19.0
2010 14.2
2009 12.4
2013 18.3
2012 26.5 -10.2 -11%
Aviation 2011 44.8
2010 22.5
2009 28.6
2013 16.5
2012 15.8 -4.1 -5%
Casualty 2011 16.9
2010 17.5
2009 20.6
2013 0.5
2012 0.4 +0.5 -
Casualty Treaty 2011 0.0
-
2010 -
2009 -
2013 37.0
2012 15.5 +22.6 +27%
Energy 2011 18.9
2010 22.1
2009 14.3
2013 58.9
2012 61.3 +14.6 +7%
Marine 2011 56.0
2010 50.3
2009 44.3
2013 12.0
2012 8.7 +0.0 +0%
Overseas Motor 2011 13.5
2010 20.1
2009 11.9
2013 22.1
2012 29.6 -11.4 -10%
Property (D&F) 2011 24.0
2010 31.3
2009 33.4
2013 4.5
2012 4.9 +1.0 +6%
Property Treaty 2011 4.7
2010 5.9
2009 3.6
2013 -
2012 - - -
UK Motor 2011 -
-
2010 -
2009 -
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
18 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s2. Key themes
2.2 Key Lloyd’s statistics
2.2.4 Lloyd’s – by OECD Class
Gross Signed Premium (US$ m) by OECD category; premium & loss ratio developments
Size of the Market
2009-13
2009-13 2009-13
Absolute
Premium Trend CAGR
Growth
2013 183.9
2012 190.6 +14.8 +2%
TOTAL 2011 197.8
2010 183.9
2009 169.1
2013 11.2
2012 25.8 +1.3 +3%
A&H 2011 15.6
2010 11.4
2009 9.9
2013 18.7
2012 19.3 +1.7 +2%
Freight 2011 17.3
2010 16.4
2009 17.0
2013 17.4
2012 16.6 -3.5 -4%
General Liability 2011 17.1
2010 17.8
2009 20.9
2013 1.5
2012 0.8 +0.6 +14%
Long Term Business 2011 1.7
2010 1.2
2009 0.9
2013 76.6
2012 70.4 +12.5 +5%
MAT 2011 90.8
2010 68.0
2009 64.1
2013 12.0
2012 8.7 +0.0 +0%
Motor 2011 13.5
2010 20.1
2009 11.9
2013 -
2012 - - -
Other Non-Life 2011 -
-
2010 -
2009 -
2013 2.2
2012 1.7 -0.1 -1%
Pecuniary Loss 2011 2.7
2010 3.0
2009 2.3
2013 44.4
2012 47.3 +2.2 +1%
Property 2011 39.1
2010 46.0
2009 42.1
Notes: All Lloyd’s data is on a country of origin basis, gross of RI and acquisition fees.
19 Source: Lloyd’s Market Intelligence calculations based on Xchanging.(2015) © Lloyd’s2. Key Themes
2.3 Market Players
2.3.1 Key insurers by size
Rank Insurer1,2 GWP (US$ m)2,3 Description
Established 1975, has a bancassurance
1 Oman Insurance 795 channel and largest overall market share in
UAE
Founded in 1972, Adnic writes both insurance
2 Adnic 655 and reinsurance business
Established in 1982 OIC provides insurance
3 Orient Insurance 435 and reinsurance services. Based in Dubai, it
operates in the UAE, Egypt & Oman
Established in 1979, IAI is a leading provider
4 Salama 280 of Shari’ah compliant Takaful solutions serving
both individual and institutional customers.
Incorporated in 1982 EIC writes both
5 Emirates Insurance 196 insurance and reinsurance business in the
UAE
6 Al Ain Ahilia 141 Established in 1975 as one of the first
insurance companies to operate in the UAE
Established in 1978, it is one of the leading
7 Al Buhaira National 140 insurance companies providing general
insurance products
Headquartered in Dubai, NGIC became an
8 National General 121 associate member of Emirates NBD Bank in
1996
One of the Six National Insurance Companies
9 Al Wathba National 110 of Abu Dhabi providing both insurance and
reinsurance
Founded in 1979, it is licensed to transact all
10 Al Sagr National 107 types of insurance business in the UAE
NOTE: (1) Top 10 Players were selected as per annual reports issued by the Emirates Insurance Authority (EIA); (2)
Figures reported are based on the audited annual financial statements; (3) Financial metrics of insurers may include an
element of life insurance; (4) Products are based on the line of business stated in the annual audited financial statements
and company’s official website aligned to the OECD classes; Source: Company annual reports and websites, press
releases
Notes: More detail for managing agents can be found in the Market Insight report
20 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.3 Market Players
2.3.2 Key insurers by class
Life Insurance Non-Life Insurance
Rank Insurer1,2 Business Focus (%)4 Class Breakdown4
47% - Property, Aviation, Transit, Liability,
1 Oman Insurance 47 53 Motor, A&H
54% - Property, Aviation, Transit, Liability 46%
2 Adnic
- Motor, A&H
92% Property, Transit, Liability, Motor, A&H
3 Orient Insurance 92
80% - Property, Transit, Liability, Motor, A&H
4 Salama 80
67% - Property, Aviation, Transit, Motor
5 Emirates Insurance 33% - Liability, A&H
6 Al Ain Ahilia N/A 93% - Property, Liability Motor, A&H, Life 7%
- Transit, Aviation
Property , Aviation, Transit, Motor, Liability,
7 Al Buhaira National N/A Motor, A&H, Life
83% - Property, Aviation, Transit, Liability,
8 National General 83 Motor, A&H
95% - Property, Liability, Motor, A&H 5% -
9 Al Wathba National
Transit & Aviation
81% - Property, Liability, Motor, A&H, Life 19%
10 Al Sagr National N/A - Transit
NOTE: (1) Top 10 Players were selected as per annual reports issued by the Emirates Insurance Authority (EIA); (2)
Figures reported are based on the audited annual financial statements; (3) Financial metrics of insurers may include an
element of life insurance; (4) Products are based on the line of business stated in the annual audited financial statements
and company’s official website aligned to the OECD classes; Source: Company annual reports and websites, press
releases
Notes: More detail for managing agents can be found in the Market Insight report
21 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.4 Distribution
2.4.1 Key distribution channels
Insurance Reinsurance
Channel type indicative % indicative % Description
Specialty lines of business including Marine
Hull, Aviation, energy risks, engineering projects
and major commercial and industrial property
risks are predominantly broker driven
Brokers ~30% ~74%
Regulatory changes in 2012 allows insurance
brokers to undertake reinsurance broking,
provided that the same broker does not act as
both the insurance and reinsurance broker for
the same transaction and customer
Direct reinsurance arrangements are evident for
large, financially stable companies that have
generally had a presences in the UAE for more
Direct ~20% ~22% than 5 years
Direct relationships are predominantly used to
obtain cover for General Accident lines of
business
Agents are not common with only 18 licensed
agents operating in the market
Independent managing ~30% ~1% Only UAE citizens can own agency companies
agents which consist of sole and multi-agency
arrangements as well as underwriting agents
Bancassurance is a relatively underdeveloped
channel for insurance
Bancassurance ~19% ~2% Islamic banks are emerging as an important
medium in the marketing and sales of family
Takaful products
NOTE: Please view Lloyd’s Crystal for a detailed summary of how business can be accessed in the Region, the UAE an the DIFC.
> www.lloyds.com/Crystal
Notes: More detail for managing agents can be found in the Market Insight report
22 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.5 Regulation
2.5.1 Key regulatory elements in the UAE
• The UAE is regulated by the UAE Insurance Authority (IA)
• Regulations require the UAE insurance companies to be registered as
public joint stock companies and get listed on the Dubai Financial
Market or Abu Dhabi Securities Exchange
• In Dec 2009 the IA placed a moratorium on new licenses for insurers:
Licence − This has prompted an increase in unincorporated JV
issuance arrangements between local and international insurers focusing
on reinsurance
• In August 2012 UAE insurers were ordered to cease trading as
composite insurers and operate under separate licenses. These
planned reforms were delayed by 3 years
• The IA has imposed stipulations to restrict the entry of foreign
players:
− New licensed foreign companies need to show that they would
FDI offer new products that are not currently present in the market,
restrictions or justify the higher need for existing coverage
UAE
− Maximum limit of 25% stake acquisition in a domestic
insurance provider
− Solvency margins are soon to be introduced in the UAE
• Only motor third party liability is compulsory in all GCC countries
Compulsory • Dubai has followed Abu Dhabi and is rolling out compulsory medical
insurance insurance in a phased manner with final implementation by 2016
Capital • In 2010 the minimum paid-up capital was doubled to US$ 27.2m for
requirements UAE insurers
• Regulatory deficiencies are ranked as the second greatest weakness
in the region, with insufficient minimum capital requirements, a lack
Strength of of minimum retention rules and also limited regulatory coordination;
regulation the regulatory environment is extremely fragmented and involves
various pseudo-regulators depending on the respective emirate eg.
Health regulators
Notes: More detail for managing agents can be found in the Market Insight report
23 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.5 Regulation
2.5.2 Key regulatory elements for the DIFC & Brokers
The insurance business within the DIFC is supervised by the Dubai
Financial Services Authority (DFSA)
Licence
Foreign insurers can operate as an offshore company registered in
the DIFC
issuance
DIFC-based companies cannot operate in other parts of the UAE;
they are allowed to directly offer insurance cover on risks based
within the DIFC and in other GCC countries
DIFC
FDI
The DFSA permits 100% foreign ownership of entities, zero tax rate
on profits and no restrictions on foreign exchange or repatriation of
restrictions
capital
Compulsory
Only motor third party liability is compulsory in all GCC countries
Insurance
FDI
In Dec 2009 the Insurance Authority placed a moratorium on new
licenses for brokers
restrictions
Brokers
A draft broking law has been circulated that mandates higher capital
Capital requirements and other criteria to regulate brokers. Once
requirements implemented, these could eliminate a number of the smaller brokers
and may lead to market consolidation
Notes: More detail for managing agents can be found in the Market Insight report
24 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.6 Takaful trends
2.6.1 UAE takaful gross contributions (in US$m)
1,314
1,162
15%
1,028
909
818
640
2009 2010 2011 2012 2013e 2014f
SHARE OF UAE IN GCC TAKAFUL MARKET
13.1% 14.4% 14.3% 14.5% 14.6% 14.8%
IMPACT ON RE-TAKAFUL
Demand
The global Takaful market is expected to reach US$ 17bn by 2015, with the GCC region
forecast to double its premiums from 2009-2015
General Takaful forms the majority of the Takaful market, driven primarily by Motor and
Medical lines of business
Strong double-digit growth in the Takaful market, along with increasing demand for Islamic
financing, presents opportunities for Re-takaful
However, limited Re-takaful capacity has led to Sharia boards accepting conventional
reinsurance solutions, constraining demand
Competition from conventional reinsurers which offer strong technical expertise and better
pricing could act as a potential growth deterrent
Profitability
Intense competition from conventional players may subdue profitability
Regulatory changes with enhanced corporate governance requirements may further add
pressure to margins
Notes: Analysis based on Alpen Capital, “GCC Insurance Industry Report, 2013
25 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.7 Reinsurance
2.7.1 Indicative number of reinsurers by category
Local insurers
DIFC based Offshore
involved in fronting Total
foreign reinsurers foreign reinsurers
arrangements
~35%
~100%
~45%
~20%
A number of The DIFC is an Proportional Local market
insurance players important arrangements of interviews
strategically act as reinsurance hub higher value indicate that
part of a fronting for the region commercial more premiums
arrangement for with various risks, including flow to offshore
local facultative foreign and Aviation, are foreign
reinsurance to regional players often ceded reinsurers
facilitate cross- having a directly offshore (~50%) versus
selling and presence to international DIFC based
synergistic reinsurers based foreign
Large
marketing in the London reinsurers
commercial
market, (~30%)
Key players are risks including
Bermuda and
Oman Insurance Energy, Excess capacity
other parts of
Co., Abu Dhabi Engineering and is perceived
Europe
National Marine are within the
Insurance Co., ceded to DIFC reinsurance
Orient Insurance market, creating
Co. and Dubai high competition
Islamic Co. and subdued
pricing levels
Notes: More detail for managing agents can be found in the Market Insight report
26 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s2. Key Themes
2.7 Reinsurance
2.7.2 Core trends summarised
Overall retention rates increased by 0.5%
between 2011 and 2013
1 Retention rates are
expected to increase In particular, Fire retention rates
increased by 12.5% and MAT by 3.0%
over the same period
There has been a trend towards non-
proportional reinsurance as proportional
treaty capacity is more difficult to obtain
The shift towards non- and event limits have become
2 proportional reinsurance commonplace
has also supported higher
retentions
Risk retention becomes more attractive
for most lines in the low investment yield
environment
Foreign insurers are expected to benefit
Foreign insurers are from technical expertise, distribution
3 expected to increase their capabilities and financial strength
presence in the GCC Western capacity is expected to increase
its share in regional reinsurance markets
Notes: More detail for managing agents can be found in the Market Insight report
27 Source: Market insight Report (January 2015); www.lloyds.com/MIPortal © Lloyd’s3 Motor IN THIS SECTION 3.1 Lloyd’s & local market context 3.2 Lloyd’s statistics 3.3 Local market statistics 3.4 Opportunity matrix 3.5 Commentary 28 © Lloyd’s
3. Motor
3.1 Lloyd’s & local market context
3.1.1 Class in context
2013 Lloyd’s Gross Signed Premium (US$ m) (insurance & reinsurance)
2012 Insurance Market Premium (US$ m)
Lloyd's Insurance
Total Market
0% Non-Life Total 182 6,119
A&H 11 2,696
Freight 19 0
7% General Liability 17 2,009
MAT 77 466
Motor 12 0
Other Non-Life 0 356
Pecuniary Loss 2 0
Lloyd's = inner circle.
Insurance Market = outer circle. Property 44 594
Long-Term Business 0 0
3.1.2 Sub-classes
Lloyd’s & Insurance Market Sub-Class Mapping (US$ m)
Lloyd’s Insurance Market
Motor 12 100% Motor - -
Casualty Treaty - -
XM,XN
Overseas Motor 12 100% Please note that no “Motor” statistics
MD,ME,MF,MG,MH,MI,M were available from local sources.
M,MP
Property (D&F) - -
5T
UK Motor - -
M2,M3,M4,M5,M6,MA,M
C,MK,ML
Notes: Mapping details can be found in the Appendix of this report
29 Source: Lloyd’s Market Intelligence calculations based on Xchanging and IA © Lloyd’s3. Motor
3.2 Lloyd’s statistics
3.2.1 Lloyd’s Motor
Gross Signed Premium (US$ million)
Calendar Year
Direct Reinsurance
25
20
15
10
5
0
2008 2009 2010 2011 2012 2013
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
30 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s3. Motor
3.3 Soft intelligence
3.3.1 Commentary – Motor
When purchasing a car insurance in the UAE, the traffic department require a 13-
month insurance certificate each time you register or renew a vehicle registration.
As in many other markets, motor business is generally the least profitable due to a
combination of strong price competition among insurance companies, high
accident rates and expensive motor repairs. (The UAE has 12.7 road deaths per
100,000 population, compared with just 3.7 in the UK.)
Most individual business is placed direct with insurers. It is estimated that about 20
% of the business is distributed through banks and motor dealers acting as
agents, 30% through brokers and 50% direct.
Most insurance companies have online information systems providing product
information, but a number of brokers offer online quotations. Oman Insurance
and other companies offer motor insurance from their call centres in Dubai. Adnic
customers can buy or renew a motor insurance policy through a mobile app within
minutes without having to visit any of the Adnic offices.
The growth of the rental car market has been significant as Dubai continues to
develop a major tourism industry.
Motor insurers do now have access to a database on drivers, which will enable
them to distinguish between good & bad drivers. This database is expected to
make it easier for an insurer to determine adequate rates. The data system,
developed by eData Management Solution in Dubai, has been welcomed by
insurance companies all over the country.
KEY FACTS
Historic motor premiums have stagnated as a result of high competition
driving down premium rates, however, new vehicle sales in the UAE are
projected to expand at 9% CAGR to 2017;
New database launched that allows insurers to view driver’s claims history.
This data is expected to enable insurers to reduce the exposure to fraudulent
claims.
Motor insurance is mainly distributed through bancassurance
arrangements, with brokers and car dealers also playing a major role and;
There is extremely high competition within Motor lines, amongst both local
and foreign players.
Motor insurance market is witnessing a soft pricing cycle but is expected to
improve as rates harden.
Notes: Soft intelligence based on Market Intelligence research
31 Source: KPMG Market Insight, (January 2015), Bridging the Gulf Report. © Lloyd’s4 MAT IN THIS SECTION 4.1 Lloyd’s & local market context 4.2 Local market statistics 4.3 Opportunity matrix 4.4 Commentary 32 © Lloyd’s
4. mat
4.1 Lloyd’s & local market context
4.1.1 Class in context
2013 Lloyd’s Gross Signed Premium (US$ m) (insurance & reinsurance)
2012 Insurance Market Premium (US$ m)
Lloyd's Insurance
Total Market
Non-Life Total 182 6,119
7% A&H 11 2,696
Freight 19 0
General Liability 17 2,009
MAT 77 466
42% Motor 12 0
Other Non-Life 0 356
Pecuniary Loss 2 0
Lloyd's = inner circle.
Insurance Market = outer circle. Property 44 594
Long-Term Business 0 0
4.1.2 Sub-classes
Lloyd’s & Insurance Market Sub-Class Mapping (US$ m)
Lloyd’s Insurance Market
MAT 77 100% MAT 466 100%
Aviation 18 24% MAT 466 100%
1,3,4,5,6,7,8,9,AO,AP,A
R,AX,CX,H,H2,H3,HX,L,
L2,L3,SC,SL,SO,X1,XY,
XZ,Y1,Y3,Y4,Y5,Y6,Y7
Energy 29 37%
EC,EG,EH,EM,EN,ET,E
W,EY,EZ
Marine 30 39%
AW,B,G,GC,GX,O,OX,R
X,SR,T,TS,TX,W,WB,W
X,X2,XE,XT
Property (D&F) 0 0%
1E,2E,2T,3T
Notes: Mapping details can be found in the Appendix of this report
33 Source: Lloyd’s Market Intelligence calculations based on Xchanging and IA © Lloyd’s4. mat
4.2 Lloyd’s statistics
4.2.1 Lloyd’s MAT
Gross Signed Premium (US$ million)
Calendar Year
Direct Reinsurance
100
80
60
40
20
0
2008 2009 2010 2011 2012 2013
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
34 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s4. mat
4.3 Local market statistics
4.3.1 MAT
Insurance premiums and loss ratios
2008 2009 2010 2011 2012 2013
Written Premium 521 551 609 635 632 466
Gross Incurred Claims 168 51 310 209 214 151
Loss Ratio, Unspecified 33.4% 9.4% 52.1% 33.3% 33.8% 29.7%
Premium Claims Loss Ratio
700 60%
52.1%
600 50%
500
33.4% 33.3% 33.8% 40%
400 29.7%
30%
300
20%
200
9.4%
100 10%
0%
2008 2009 2010 2011 2012 2013
Notes: Mapping details can be found in the Appendix of this report
35 Source: Lloyd’s Market Intelligence calculations based on IA © Lloyd’s4. mat
4.4 Soft Intelligence
4.4.1 Opportunity matrix- MAT Poor Good
Dimension Score Rationale
MAT represents a relatively small class, representing
Size 7% of total insurance market premiums.
There was a gradual increase in premiums up until
2011 and then premiums began to decline, in 2013,
Growth figures stood at US$ 466m, the lowest in at least six
years.
Historically, when looking purely at Incurred loss
ratios, MAT has performed relatively well with figures
Performance staying around 30% and the highest in 2010 being only
52%.
New distribution channels such as telesales and use of
the internet are being developed. Bancassurance has
also been developing. In 2011, 13 insurance agents
Distribution were licensed, as were 170 brokers. Brokers are the
key distribution channel particularly for larger
commercial risks. Most of the risks are transferred on a
facultative business to the London Market.
With regards to Aviation insurance; there is limited
regional competition, with the exception of Oman
Insurance which now actively underwrites direct and
Competition facultative reinsurance Aviation business. Transit is
considered to be a profitable line of business, although
rates are expected to decrease by 10% - 20% due to
high levels of competition.
The MAT sector is expected to continue developing in
the UAE. There are around 50 projects underway in
the UAE relating to oil & gas, power and renewable
energy as at May 2014. While small, the Aviation
Overall market is considered to be a profitable line with good
loss records and potential to grow. Strong investments
in Energy infrastructure may boost demand for Marine
reinsurance following a sharp decline in 2013.
Notes: Soft intelligence based on Market Intelligence research
36 Source: Market Intelligence based soft intelligence and hard data from regulator, KPMG © Lloyd’s4. mat
4.4 Soft intelligence
4.4.2 Commentary – MAT
Marine- Key Trends
Strong investments in Energy infrastructure may boost demand for Marine
reinsurance following a sharp decline in 2013.
There are around 50 projects underway in the UAE relating to oil & gas, power
and renewable energy as of May 2014;
Marine hull business suffers from the declining importance of international trade
as an engine of regional growth, as well as the absence of large commercial
fleets in the Middle East. As such it is expected to remain one of the slowest
growing lines of business;
Transport by sea is regarded as the safest method of transport in the region,
which is particularly relevant for high-value goods. Dubai is at the forefront of
trade in the region, and the establishment of specialised free zones and
economic clusters, has effectively positioned Dubai as the hub of trade to the
vast markets of the Gulf region, North Africa and the Indian subcontinent.
Aviation- Key Trends
Aviation risks are largely ceded offshore to London and other European
markets.
The Aviation market is relatively under-developed with very few players
offering Aviation cover as most of the risk is reinsured on a facultative basis
with European/London market;
The air transport industry in the Gulf region however, is experiencing an
expansion, which is among the fastest in the world. The growth and
transformation of the UAE, in particular, into a major business and tourist hub is
evident by the tremendous increase in passengers and cargo aircraft
movements the past few years. The Dubai-based Emirates Airlines is one of
the world’s fastest-growing international Airlines and Aviation is considered
to be a highly profitable line with good loss records;
There are three principal aviation fleets in the UAE, Emirates, Etihad and
Arabia, all of which are insured overseas on a non-admitted basis.
Notes: Soft intelligence based on Market Intelligence research
37 Source: KPMG Market Insight, (January 2015) © Lloyd’s4. mat
4.4 Soft intelligence
4.4.3 Commentary – MAT
Transit- Key Trends
Oil and gas exports are expected to continue to drive Transit premiums,
despite a sharp decline in 2013.
The UAE is the 4th largest global exporter of crude oil & gas, exporting around
81% of its total production. This equates to the UAE exporting approximately
2.32 million barrels of crude oil each day, predominantly to Asian markets;
Dubai in particular is an important trans-shipment centre to Iran and GCC
countries with significant road transport business;
Transit, and particularly Marine Cargo, is considered to be a profitable line of
business, however rates are expected to decrease by 10% - 20% as soft
market conditions continue;
Transit remains highly competitive, with leading international reinsurers in the
DIFC being increasingly active in the market.
KEY FACTS
The UAE’s, and Dubai’s in particular, growing importance as a trading hub
with significant investments in tourism and logistics is likely to spur future
demand for marine, aviation and transit.
The air transport industry in the Gulf region is experiencing an expansion,
which is among the fastest in the world. Airlines throughout the region largely
demand general aviation policies, for which Marsh, Aon and Willis are believed
to have a strong position.
There are very high levels of competition in Transit insurance, whereas
competition in Aviation placement appears to be more limited.
Notes: Soft intelligence based on Market Intelligence research
38 Source: KPMG Market Insight, (January 2015) © Lloyd’s5 Property IN THIS SECTION 5.1 Lloyd’s & local market context 5.2 Lloyd’s statistics 5.3 Local market statistics 5.4 Opportunity matrix 5.5 Commentary 39 © Lloyd’s
5. property
5.1 Lloyd’s & local market context
5.1.1 Class in context
2013 Lloyd’s Gross Signed Premium (US$ m) (insurance & reinsurance)
2012 Insurance Market Premium (US$ m)
Lloyd's Insurance
10% Total Market
Non-Life Total 182 6,119
24% A&H 11 2,696
Freight 19 0
General Liability 17 2,009
MAT 77 466
Motor 12 0
Other Non-Life 0 356
Pecuniary Loss 2 0
Lloyd's = inner circle. Property 44 594
Insurance Market = outer circle.
Long-Term Business 0 0
5.1.2 Sub-classes
Lloyd’s & Insurance Market Sub-Class Mapping (US$ m)
Lloyd’s Insurance Market
Property 44 100% Property 594 100%
Energy 8 18% FIRE 594 100%
EF
Marine 10 22%
FA,FR,GS,JB,WL
Property (D&F) 22 50%
3E,6T,B2,B3,B4,B5,BD,
CA,CB,CC,DC,F,HP,N,
NB,NP,NX,P2,P3,P4,P5
,P6,P7,PD,PG,TE,TO,T
U,TW
Property Treaty 5 10%
AG,HA,TR,X3,XA,XC,XJ,
XP,XR,XU,XX
Notes: Mapping details can be found in the Appendix of this report
40 Source: Lloyd’s Market Intelligence calculations based on Xchanging and IA © Lloyd’s5. property
5.2 Lloyd’s statistics
5.2.1 Lloyd’s Property
Gross Signed Premium (US$ million)
Calendar Year
Direct Reinsurance
50
40
30
20
10
0
-10
2008 2009 2010 2011 2012 2013
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
41 Source: Market Intelligence calculations based on Xchanging (2015) © Lloyd’s5. property
5.3 Local market statistics
5.3.1 Fire
Insurance premiums and loss ratios
2008 2009 2010 2011 2012 2013
Written Premium 446 582 617 684 659 594
Gross Incurred Claims 334 246 356 356 603 256
Loss Ratio, Unspecified 76.4% 46.6% 59.0% 54.2% 90.2% 41.3%
Premium Claims Loss Ratio
800
90.2% 100%
700
76.4%
600 80%
500 59.0%
54.2%
60%
400 46.6%
41.3%
300 40%
200
20%
100
0%
2008 2009 2010 2011 2012 2013
Notes: Mapping details can be found in the Appendix of this report
42 Source: Lloyd’s Market Intelligence calculations based on IA © Lloyd’s5. property
5.4 Soft Intelligence
5.4.1 Opportunity matrix – Property/ Fire Poor Good
Dimension Score Rationale
Property is a relatively small class, making up only
Size 10% of the total insurance market premiums.
Fire premiums increased at a stable pace from 2008-
2011 but since then they have declined annually; in
Growth 2013 figures stood at US$ 594mn (lower that 2010
premiums) and based on previous trends it ‘s
expected that they will continue to fall.
Historically, when looking purely at Incurred loss
ratios, fire has performed moderately well with figures
Performance staying below 60%. However in 2012, we saw a huge
increase as figures shot to 90%.
New distribution channels such as telesales and use of
the internet are being developed. Bancassurance has
also been developing. In 2011 13 insurance agents
Distribution were licensed, as were 170 Brokers. Brokers are the
key distribution channel particularly for larger
commercial and engineering risks.
Property is a highly competitive market with leading
European reinsurance entities actively competing for
Competition business in the DIFC (Dubai International Financial
Centre)
Based on previous trends the Property class is
expected to continue growing with future infrastructure
and construction projects. Additionally with huge
developments in places such as Dubai and Abu
Overall Dhabi the sector is predicted to thrive. Engineering is
one of the most profitable lines of business, with price
increases expected. Property cession rates have
increased from ~60% in 2008 to ~75% in 2013.
Notes: Soft intelligence based on Market Intelligence research
43 Source: Market Intelligence based soft intelligence and hard data from regulator, KPMG © Lloyd’s5. property
5.4 Soft Intelligence
5.4.2 Commentary – Property
In previous years, there were very few companies in the UAE that provided
property insurance. AXA, one of the few companies to have been providing
property insurance in the local market for a while, had hardly any local customers
in the past and was selling mostly to a small number of British expatriates. Lack of
broad demand was largely attributable to the feeling of security among residents,
which boils down to the fact that theft is not a significant issue in the UAE and
the region at large. Additionally, a lack of catastrophe exposures (with the
exception of earthquakes in Iran) – may have also be a contributory factor to low
general demand for property insurance.
But as places such as Dubai and Abu Dhabi develop, more people are
purchasing property insurance and there is awareness in the market about the
need for insurance among both the expatriates and the local population. The
Gulf’s property insurance has enjoyed increasing attention amid recent
announcements of new property laws in Abu Dhabi and Dubai, in particular. With
people buying properties in the UAE, companies such as AXA are
witnessing a pick-up in the property insurance business.
With growing affluence among locals and the resumption of infrastructure
projects, the property market has shown considerable growth. Construction
has become one of the constants of daily life for many cities across the GCC.
From tower blocks to luxury hotels, shopping complexes to multilane highways,
builders toil day and night to meet the deadlines set by governments and private
developers. There were over 100 infrastructure and construction projects
underway in the UAE as at May 2014. These are in preparation for events such as
the Dubai World Expo 2020 and the Mohammed Bin Rashid City in Dubai, which
includes a park to receive 35 million visitors annually – which could create further
impetus for growth.
Today property is the second largest GWP pool in the UAE and since 2008
has shown stable growth at 4.5% CAGR with the exception of 2013.
Engineering is considered to be one of the most profitable lines of business,
whereas fire is considered to be one of the slowest growing and least profitably
lines of business, with rate decreases of 20% - 30% expected due to excess
capacity with renewals under continuing pressure.
Notes: Soft intelligence based on Market Intelligence research
44 Source: KPMG Market Insight, (January 2015), Bridging the Gulf Report © Lloyd’s5. property
5.4 Soft Intelligence
5.4.2 Commentary – Property
KEY FACTS
As places such as Dubai and Abu Dhabi develop, more people are
purchasing property and there is awareness in the market about the need
for insurance among both the expatriates and the local population.
Build quality tends to be high; low-quality construction does not tend to be
insured in the first place, keeping loss ratios at bay; property insurance
business in the region generally tends to be profitable.
Property is a highly competitive market and this has resulted in a decline in
rates, reflected in the 2013 GWP.
Brokers are the key distribution channel particularly for larger commercial
and engineering risks.
Notes: Soft intelligence based on Market Intelligence research
45 Source: KPMG Market Insight, (January 2015), Bridging the Gulf Report © Lloyd’s6 Pecuniary Loss IN THIS SECTION 6.1 Lloyd’s & local market context 6.2 Lloyd’s statistics 6.3 Local market statistics 6.4 Opportunity matrix 6.5 Commentary 46 © Lloyd’s
6. Pecuniary Loss
6.1 Lloyd’s & local market context
6.1.1 Class in context
2013 Lloyd’s Gross Signed Premium (US$ m) (insurance & reinsurance)
2012 Insurance Market Premium (US$ m)
Lloyd's Insurance
0% Total Market
Non-Life Total 182 6,119
A&H 11 2,696
1%
Freight 19 0
General Liability 17 2,009
MAT 77 466
Motor 12 0
Other Non-Life 0 356
Pecuniary Loss 2 0
Lloyd's = inner circle.
Insurance Market = outer circle. Property 44 594
Long-Term Business 0 0
6.1.2 Sub-classes
Lloyd’s & Insurance Market Sub-Class Mapping (US$ m)
Lloyd’s Insurance Market
Pecuniary Loss 2 100% Pecuniary Loss - -
Accident & Health 1 64%
P,PB,PC,PF,PN,PS,PU,
PW,PZ
Please note that no “Pecuniary Loss”
Marine 1 36% statistics were available from local
BS,CF,CN,CR,FG,FM,F
sources.
S,PR,SB
Property (D&F) - -
4T,LE,WA,WS
UK Motor - -
PQ
Notes: Mapping details can be found in the Appendix of this report
47 Source: Lloyd’s Market Intelligence calculations based on Xchanging and IA © Lloyd’s6. Pecuniary Loss
6.2 Lloyd’s statistics
6.2.1 Lloyd’s Pecuniary Loss
Gross Signed Premium (US$ million)
Calendar Year
Direct Reinsurance
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2008 2009 2010 2011 2012 2013
Notes: Data based on a country of origin basis (where policyholders are based), gross of reinsurance & acquisition fees.
48 Source: Market Intelligence calculations based on Xchanging, (2015) © Lloyd’s7 General Liability IN THIS SECTION 7.1 Lloyd’s & local market context 7.2 Lloyd’s statistics 7.3 Local market statistics 7.4 Opportunity matrix 7.5 Commentary 49 © Lloyd’s
7. General liability
7.1 Lloyd’s & local market context
7.1.1 Class in context
2013 Lloyd’s Gross Signed Premium (US$ m) (insurance & reinsurance)
2012 Insurance Market Premium (US$ m)
Lloyd's Insurance
Total Market
Non-Life Total 182 6,119
A&H 11 2,696
10% Freight 19 0
General Liability 17 2,009
MAT 77 466
Motor 12 0
33%
Other Non-Life 0 356
Pecuniary Loss 2 0
Lloyd's = inner circle.
Insurance Market = outer circle. Property 44 594
Long-Term Business 0 0
7.1.2 Sub-classes
Lloyd’s & Insurance Market Sub-Class Mapping (US$ m)
Lloyd’s Insurance Market
General Liability 17 100% General Liability 2,009 100%
ACCIDENT & LIABILITY 2,009 100%
Casualty 16 95%
BB,CY,D2,D3,D4,D5,D
M,DO,E2,E3,E4,E5,E6,
E7,E8,E9,F2,F3,GH,GM
,GN,GP,GT,NA,NC,PI,P
L,PM,UA,UC,W2,W3,W
4,W5,W6,WC
Casualty Treaty 1 3%
XD,XF,XG,XH,XL
Energy 0 2%
EA,EB
Property (D&F) - -
4E,7T,NL
Notes: Mapping details can be found in the Appendix of this report
50 Source: Lloyd’s Market Intelligence calculations based on Xchanging and IA © Lloyd’sYou can also read
