Blockchain Technology and the Future of the Global Insurance Industry
Insurance 2022 - the year ahead
Regulatory harmonisation, scrutiny and a push for consolidation are set to transform the market in the Gulf Cooperation Council in the coming year.
Following recent initiatives by the insurance regulator, the UAE Central Bank, we have seen a flurry of regulations in the last two years with separate regulations for bancassurance, insurance agents, insurance brokers, aggregators, digital distribution, points of sale and insurance producers.
We predict that there will be an element of harmonisation of the requirements for these distribution channels, and increased focus on conduct of business requirements and qualifications, and ongoing professional development for distributors’ staff. Utilising the experience gained through the life insurance regulations, we also anticipate that there will be greater scrutiny of the commercial arrangements between insurers and their distributors to ensure that consumers are adequately protected and that the interests of all parties are aligned.
Furthermore, the continued development of the regulatory sandboxes in the UAE (including in the financial free zones of the DIFC and ADGM) will see greater use of technology to facilitate distribution and drive efficiencies in the distribution chain.
Meanwhile, the two largest insurance markets in the GCC, Saudi Arabia and the United Arab Emirates, remain highly competitive with 29 and 60 licensed insurers respectively. We expect that regulators will continue to push for further consolidation following recent mergers in both countries (including the combinations of Dar Al Takaful of Noor Takaful in the UAE and Gulf Union Cooperative Insurance and Al-Ahlia Cooperative Insurance in KSA).
This trend will not be limited to insurance companies, as was demonstrated by the recently announced merger of two insurance broking businesses in KSA, Abdul Latif Jameel Insurance Brokers and StarCare Insurance Brokerage, earlier this year. We also anticipate that the larger regional players will continue to seek growth through mergers and acquisitions of insurance portfolios.