Page 36 - Insurance Times March 2024

contact and potential risks associated with AI commitment, alongside implementing comprehensive
implementation must be addressed. sustainability programs aimed at significantly reducing its
Despite the pressure to innovate, some insurers in the carbon footprint.
Middle East have yet to establish a robust digital To facilitate and monitor this transformation, the CBUAE has
infrastructure. However, industry leaders who have invested adopted a progressive medium-term strategy with
in digital processes and systems are well-positioned to seize ambitious annual targets and global benchmarks. Key
opportunities created by new technologies and changing strategic objectives include ensuring compliance with
customer behaviours. international standards across all functional areas, driving
In conclusion, the future of insurance lies in embracing digital technology adoption within the financial sector,
digital transformation fully. By leveraging data, technology, strengthening partnerships with central banks and
and innovative solutions, insurers can enhance operational international bodies, and integrating sustainability into policy
mandates and operations.
efficiency, improve customer experiences, and position
themselves for long-term success in an increasingly In 2022, the CBUAE intensified sustainable finance initiatives,
competitive landscape. enhanced surveillance of the UAE financial system's
resilience and vulnerabilities, and sharpened focus on
Q. In what ways do the Emirates Insurance Association Environmental, Social, and Governance (ESG) risks in
and Gulf Insurance Federation foster collaboration among financial institutions. The CBUAE conducts thorough
industry players, both regionally and internationally? surveillance of sustainability factors in financial markets and
A: Through participation in conferences, seminars, and the institutions, identifying ESG risks and opportunities in
establishment of Memorandums of Understanding (MOUs) comparison to international benchmarks and best practices.
with each association and federation across GCC countries,
Furthermore, the CBUAE maintains exposures to ESG
insurers in the region foster collaboration and knowledge- financial assets in reserve management policies, with a focus
sharing. Membership in organizations like the General Arab
on green and sustainable instruments that comply with risk
Insurance Federation (GAIF) and the Federation of Afro- parameters. Looking ahead, sustainability criteria will be
Asian Insurers and Reinsurers (FAIR) further strengthens ties further embedded in strategic asset allocation, with ongoing
within the insurance community and facilitates cooperation efforts to facilitate climate-risk stress testing capabilities and
on regional and international levels. enhance risk mitigation measures.
Moreover, insurers engage in collaborative efforts with In the insurance sector, the CBUAE assesses climate change
authorities and federations both regionally and
risks and opportunities, focusing on risk mitigation measures
internationally to address common challenges and promote and adaptation strategies associated with the sustainability
industry best practices. This includes partnerships with
transition. The CBUAE remains committed to addressing
organizations such as the International Association of climate change and promoting sustainable practices across
Insurance Supervisors (IAIS) to ensure compliance with the banking, insurance, and financial services sectors in the
global standards and regulations. UAE.
By actively participating in these initiatives and maintaining
close relationships with various industry stakeholders, Q. How Risk Management has evolved in the Gulf region
over the years and how the industry is embracing the
insurers in the GCC region enhance their collective
knowledge, strengthen regulatory compliance, and risk management culture.
A: In 2022, the Central Bank of the UAE (CBUAE)
contribute to the overall growth and development of the
insurance sector. demonstrated its commitment to enhancing trust and
confidence in the UAE's financial services sector through the
adoption of leading international standards and practices in
Q. How is the insurance industry in the Gulf addressing internal risk management and compliance. Several
sustainability and environmental, social, and governance significant milestones were achieved, strengthening the
(ESG) considerations?
CBUAE's risk and governance frameworks and practices.
A: Moving forward, the Central Bank of the UAE (CBUAE)
remains steadfast in its commitment to sustainability and The issuance of regulations and standards in various areas
sustainable finance, aligning with global initiatives such as underscores the CBUAE's dedication to promoting sound risk
COP28 and the 'Year of Sustainability' in the UAE. The CBUAE management practices.
is actively working on policy initiatives to reflect this The Corporate Governance Regulation outlines core duties

The Insurance Times March 2024 33