Page 18 - Insurance Times March 2016 Sample
P. 18
Tapping into the potential of the UAE's life insurance Valuation started well
sector
before the FDI imposed
A rising number of expatriates and an this growth. he UAE's life insurance
improving economy are contributing to segment has the highest insurance in insurers
the strong performance of the UAE's penetration rate in the Gulf Coopera-
life insurance segment, which is set to tion Council (GCC) region, at 0.62% in In anticipation of the policy changes
witness improved growth in the next 2014. regarding the
four years, according to a FDI, the valua-
report by Timetric's Insur- The UAE's economy re- tion process in
ance Intelligence Center. corded substantial the insurance
growth, with GDP in- sector was set
The life segment's gross creasing from AED1.2 tril- off much before the new policy was
written premium grew lion (US$314.5 billion) in announced. In December 2014,
from AED3.8 billion 2010 to AED1.4 trillion Housing Development Finance Cor-
(US$1.0 billion) to AED7.5 billion (US$369.8 billion) in 2014, at a CAGR poration had said the Azim Premji
(US$2.0 billion) over the last five years, of 4.1%. At the same time, the Trust would buy a 0.95 per cent stake
at a review-period CAGR of 18.7%. The country's unemployment rate de- in its life insurance venture, HDFC
segment is anticipated to grow at an creased from 4.0% in 2010 to 3.8%. Life, for Rs 198.9 crore. The deal
annual rate of 10.8% p.a. up to 2019. These positive economic trends are ex- valued HDFC Life at Rs 19,890 crore.
The UAE's growing expatriate popula- pected to translate into higher in-
tion, positive economic outlook and comes and this should encourage In October, ICICI Bank said it would
adoption of new solvency standards are greater using of saving related prod- sell a 9 per cent stake in ICICI
expected to be the main drivers behind ucts such as life insurance. Lombard General Insurance to
Fairfax Financial for Rs 1,550 crore.
The Islamic Banking & Investment Asia/Middle East The deal valued the company at Rs
17,225 crore, making it the most
Congress 2016 in April valued private general insurer.
The Islamic Banking & Investment of this funding while posing an enor- In November, ICICI Bank announced
Asia/Middle East Congress 2016 will mous challenge also presents an excit- it would sell a 6 per cent stake in
take place on the 5th & 6th of April ing opportunity - specifically for Islamic ICICI Prudential Life Insurance to
2016 at Singapore, under the theme finance. Premji Invest and its affiliates, and
"Responding to Headwinds & Refresh- Compassvale Investments Pte, a unit
ing the Vision for Islamic The recent establishment of the Asian of the Singapore-based Temasek, for
Finance", and will be Infrastructure Invest- Rs 1,950 crore. The deal values the
held under the auspices ment Bank (AIIB) pro- life insurance company at Rs 32,500
of H.H. Sheikh Salman vides new impetus to crore, making it the highest valued
bin Khalifa Al Khalifa, tapping into the growing private insurance company.
Special Envoy - Kingdom of Bahrain pool of Islamic investors
and Patron of the Islamic Banking & In- At a time when insurance penetra-
vestment Asia/Middle East Congress across the Middle East and Asia as the tion is low, IRDAI is of the view that
2016. AIIB seeks to strengthen collaboration FDI will enable more funds into the
with the Islamic Development Bank sector, thereby improving penetra-
It features a fresh new approach on (IDB) on the use of Sukuk to contrib- tion.
how industry leaders can engage with ute to the financing of these large-
the key issues impacting the future of scale infrastructure projects. The additional funds brought in by
Islamic finance. Experts have projected foreign joint venture partners will be
that an estimated US$ 60bn per year The Asian Development Bank (ADB) used by insurers not only to expand
will be required until 2022 to meet the has already been working with the IDB presence across the country, but also
basic infrastructure needs across to provide Islamic infrastructure financ- for digital initiatives to make the
ASEAN member states alone. The scale ing solutions and these new develop- process of buying and selling insur-
ments are projected to significantly ance more efficient and easier.
spur new growth in the industry.
18 The Insurance Times, March 2016
