Bracing for bigger losses in insurance

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

With 35 years under his belt and as he continues to lead one of the most successful insurance companies in the UAE, Abdul Muttalib Al Jaidi, CEO of Oman Insurance Co. (OIC), is one of the most respected names in the country’s insurance sector. Policy spoke to the Al Jaidi after the company’s 2010 results were revealed.

How is the UAE’s insurance market faring so far?

The starting point in 2011 indicated another challenge for insurance companies. Competition is getting tougher and rates are getting cut. The number of companies operating in the market is again increasing and there are no signs of slowing down the mushrooming of new insurance companies.

Q: How heated is the competition exactly?

The premium is not going to go down or go any less than it has. There have only been marginal gains for insurance companies compared to figures in 2009 and the possibility of recording larger losses is very much there.

Q: Is this a good time to consider consolidation between insurance companies then?

We wish to see a sort of consolidation. Someone has to leave his ego aside and try to think drastically about the necessity and impact of consolidation not just for their individual companies but also for the market.

The problem here is nobody is prepared to consolidate with another company. Nobody is prepared to sacrifice. So, there is no serious sign for any mergers or acquisitions.

It’s time to reduce the number of operators to make the market healthy.

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Tags: competition, insurance, OIC, Oman, Oman insurance, policy, rates, UAE