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Expanding Distribution Horizons In The UAE
Expanding Distribution Horizons In The UAE
Insurers in the UAE have had to revaluate their performance either to adhere to the regulatory directives or because of mounting pressure by shareholders after the discouraging

Results of the past two years, which has eroded the capital of some insurers as well, said Mr Mustafa Vazayil, Managing Director of Gargash Insurance Services.

“All this is leading to a very slow change towards achieving a positive approach to underwriting. With the regulatory support, this trend will continue and the market will improve further because insurers now will have to go through this evolutionary scenario. As the regulator enforces it in a more robust manner, insurers will have no choice but to look at making underwriting profits.”


Currently, the market includes around 170 intermediaries, and consolidation will have to eventually occur, he said.

“The new brokers regulation, issued in 2009, did not bring down the number of brokers as expected, though it has organised the profession. But in the medium term there will be mergers or some will be leaving the market. Next year will see acceleration in M&A in the broking area.”

“Next year will see acceleration in M&A in the broking area.”

Mr Mustafa Vazayil, Managing Director, Gargash Insurance Services


The intermediary vs online channels

Online and aggregator channelsare gaining ground but mainly for personal lines insurances, which are slowly getting commoditised, opined Mr Vazayil.

“Once they become fully commoditised, the aggregators will increasingly start to pick up business. Fortunately for intermediaries, motor insurance in the UAE is not fully standardised with regard to scope of cover and claims services. As such, it has not reached the level of a commoditised product and hence customers will be wary of buying into the unknown with regard to product and after sales (claims) service.

“To counter the aggregator marketing, intermediaries themselves will also reach personal lines customers through online means. The aggregators’ business, even globally except for some areas in the UK, does not account for more than 20% of the new business.Usually, price-sensitive clients target aggregators.


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