Bracing for bigger losses in insurance
Despite threats of huge losses, there have been no serious considerations for consolidation in UAE’s insurance sector. OIC’s CEO says egos need to be set aside or something’s gonna give.
April 15, 2011 2:58 by shafeer
Q: You’ve had to take major hits on your investment income. What happened?
The major drag was on the investment income, where we were very active. The market volatility was sharp and we were hit hard. There were no signs of a dip or any other alerts. It hit us from nowhere. We could not reduce our exposure to the equity market and property.
In the local market we do not have any other avenues other than property and equities for investing, where we were doing well. At one time, we were even doing Dh750 million in 2005 when the market was booming.
Q: So how do you bounce back from that?
We recently started diversifying and were able to bring down the equity exposure from 87 per cent to less than 45 per cent. We want to bring them in line with what the Insurance Authority is deciding.
Q: You’ve indicated on launching a Takaful company. How timely is this plan, especially when most Takaful companies are reporting losses?
If we are able to do it rightly, yes, there is a possibility. The problem is most of the Takaful companies in operation here are not operating in the real Takaful way. So, if we come across an opportunity where we are able to play as per rules, we may go for it.
Q: In the overall insurance sector, where do you see growth coming from?
Well, any crash brings more opportunities—from both the customer and the insurance companies.