This chapter includes the following articles.
Insurance penetration in Dubai is very low and the potential for growth is immense, making the sector competitive and highly oriented toward future expansion. However, the current operating environment is challenging, with companies competing on price to capture market share, scale up customer bases and boost profits. An additional obstacle in the past year has been the decline in oil prices. Though the emirate is not directly exposed – indeed, as a net importer it benefits – the regional focus on crude exports means less liquidity in the economy overall. It also means a drop in valuations for most types of assets, including those insurers who typically hold their investment portfolios, such as equities and real estate. The emirate also hosts an offshore insurance sector in its financial free zone, the Dubai International Financial Centre (DIFC), and the operators housed there have helped create a centre for reinsurance, with specialist providers operating in niche markets. These firms are limited in their ability to service the domestic market and are instead looking at regional, African and Asian markets as a catchment area for customers.