The United Arab Emirates, relative to other countries in the Middle East and Africa, is a moderately attractive insurance market for foreign insurers. In the latest report of Research and Markets on “United Arab Emirates Insurance Report Q1 2008,” it said within the region, the UAE is notable for its high per capita GDP. The economic outlook is sound, although high inflation remains a risk. Government policies are likely to remain constant over the long- term. However, the Insurance Business Environment Rating (IBER) is held back by the underdevelopment of the life segment and the financial infrastructure. It is also held back by the legal framework and bureaucracy. The UAE is characterized by a very small life segment and a somewhat larger yet still small non-life segment. For both segments, the degree of openness to foreign entrants is not great, and penetration levels are small. Key strengths of the UAE's insurance sector include low long-term financial risk, high GDP per capita, good odds of policy continuation, and a reasonably amenable taxation system by regional standards. Over the forecast period, the report anticipates that non-life premiums will grow by 20 percent annually in local currency and in US dollar terms. Life premiums are expected to increase by 20 percent annually in local currency and in US dollar terms. The key drivers of growth in the non-life segment in 2007-2012 will be the anticipated rise in nominal GDP from around $186 billion to $303 billion and an expected increase in non-life penetration from 1.3 percent of GDP to 2.0 percent. The key driver of growth in the life segment is an envisaged moderate rise in life density from about $100 per capita in 2007 to $150 per capita in 2012. The United Arab Emirates Insurance Report provides independent forecasts and competitive intelligence on United Arab Emirates insurance industry. The IBER brings together a number of pieces of relevant quantitative data, together with a Country Risk Rating (CRR), which makes it much easier to consider the business environment for the insurance sector in any one country relative to the business environment for other industries in that country that are surveyed by BMI, and the business environment for the insurance sector in other countries. The UAE's IBER is 54.7. The UAE's total population is growing quickly. The competitive landscape in both the non-life and the life segment is home to a number of cross border firms. In the case of the non-life segment, seven foreign operators offer products in the UAE. Meanwhile, in the case of the life segment, three cross border firms are operative. Of these three firms, two (AXA and AIG) also offer non-life segment lines. A separate study said, moreover, that overseas property investors could take advantage of favorable market conditions in the UAE. According to ShelterOffshore.com, the UAE has performed strongly because these issues have led to local investors reining in their overseas ventures. As a result, many are choosing to stay closer to home and are therefore encouraging growth in the domestic market. ShelterOffshore.com said: “Each emirate is worth closer inspection by would-be property investors.” The website added that the growth of tourism in the UAE has also helped boost the country's appeal to foreign investors. Even in tourism, the UAE excelled in six different categories recognizing the country's global standings in hospitality, shopping and business sectors. FutureBrand, an international rating agency, said the UAE has become the only country to have garnered six accolades for its excellent tourism and business infrastructure. It has emerged as top destination in resort/lodging options category for its all-round offerings. “With the largest number of brand new properties, the UAE boasts a wide variety of options-from family-oriented beach resorts to the world's only 7-star hotel,” said the citation. The country ranked second after the United States as a shopping destination. __
