News & Events

The UAE insurance industry has experienced significant developments and growth in 2023:

• Stronger Position of the Sector: The UAE insurance sector has shown a robust performance over the last three years, culminating in a much stronger position as of 2023. This improvement indicates the effectiveness of strategies and efforts implemented in the sector over recent years.
• Growth in Total Assets: During the first nine months of 2023, the UAE insurance sector saw a 9.6% increase in total assets, reaching $35.8 billion. This growth demonstrates the sector's financial health and its capacity to expand its asset base significantly.
• New Accounting Standard - IFRS 17: Starting from January 1, 2023, IFRS 17 has replaced IFRS 4 as the new standard for accounting and financial reporting for insurance companies in the UAE. This standard is pivotal for the recognition, measurement, and disclosures of insurance and reinsurance contracts, marking a significant shift in financial reporting within the sector.
• Introduction of Insurance Law 2023: The UAE introduced Federal Law No. 48 of 2023, also known as the “Insurance Law 2023,” which repealed the older Federal Law No. 6 of 2007. This new legislation, effective from November 30, 2023, brought several significant changes, especially in the area of insurance dispute resolution. The introduction of this law signifies a major regulatory update in the UAE insurance landscape.
• Changes in Motor Insurance Pricing: The Central Bank of the UAE decided to withdraw its circular that previously allowed up to a 50% discount on motor insurance rates. This move, coupled with improvements in pricing, suggests a strategic shift in how motor insurance is priced and regulated in the UAE.

These developments reflect the dynamic nature of the UAE's insurance industry, highlighting its growth, regulatory changes, and adaptation to new financial reporting standards. he UAE insurance industry has seen several significant merger and acquisition (M&A) activities in 2023:

Mergers and Acquisitions

• General M&A Trend: The insurance industry in the UAE, as part of the broader Middle East region, has experienced a spike in M&A activities. Despite economic challenges like the threat of a recession, the sector remains active in consolidations and strategic acquisitions. This trend is partly driven by regulatory changes, including the Central Bank of the UAE's move to merge and incorporate the Insurance Authority into its operations.
• Salama's Acquisition of Aman's Insurance Portfolio: Salama, listed on the Dubai Financial Market, has agreed to acquire the motor, medical, non-motor, and group life insurance businesses of Aman. This transaction, expected to be completed in the first quarter of 2023, is subject to regulatory approval. The acquisition aims to add scale and expand Salama's service offerings.
• Merger of Salama and Takaful Emarat: Another notable development is the merger between Salama and Takaful Emarat. This all-share deal represents a significant step in consolidating the insurance sector in Dubai. The formal agreement for this merger has been signed, marking a major consolidation in the UAE's insurance landscape.

In the UAE insurance industry, there have been significant developments involving Noor Takaful, Dar Al Takaful, and Watania Takaful:

• Dar Al Takaful and Watania Merger: Shareholders of Dar Al Takaful and National Takaful Company (Watania) approved a merger, creating the largest takaful provider in the UAE by market share. This merger, completed in July 2022, was a significant step in consolidating the takaful (Islamic insurance) market in the UAE.
• Acquisition of Noor Takaful by Dar Al Takaful: Prior to the merger with Watania, Dar Al Takaful completed the acquisition of Noor Takaful in 2020. This acquisition expanded Dar Al Takaful's footprint in the UAE's Islamic insurance sector.
• Rebranding of Noor Takaful: Following these mergers and acquisitions, there was a rebranding of Noor Takaful. Noor Takaful General PJSC and Noor Takaful Family PJSC were rebranded as Watania Takaful General and Watania Takaful Family, respectively. This rebranding was part of the integration process following the mergers.
• Formation of Watania International Holding: In March 2023, the name of the holding company, Dar Al Takaful, was changed to Watania International Holding PJSC. This renaming was a significant part of the merger process, indicating the completion of the integration of these entities under a single holding company.
• Share Exchange in the Merger: As part of the merger agreement, Watania shareholders received a specific number of Dar Al Takaful shares for every Watania share they owned. This share exchange was a crucial aspect of the merger, defining the financial terms and the value of the combined entity.

These developments reflect a trend of consolidation and strategic alignment in the UAE insurance sector, particularly in the takaful market, aimed at creating larger, more competitive entities with expanded market reach and service capabilities

• Merger of Dar Al Takaful and Watania: Two of the largest Islamic insurance companies in the UAE, Dubai-based Dar Al Takaful (DAT) and Abu Dhabi-based Watania, have announced their merger. This merger is set to create a larger entity, reflecting the growing trend of consolidation in the Islamic insurance sector within the UAE.
• Cost Synergies from Mergers: Mergers in the UAE insurance sector have led to significant cost synergies. In 2023, one such merger resulted in cost synergies of around Dh20 million, demonstrating the financial benefits and efficiency gains that can be achieved through strategic consolidations.

These developments indicate a strong trend towards consolidation in the UAE insurance market, with companies seeking to enhance their market position, achieve cost efficiencies, and expand their service offerings through strategic mergers and acquisitions.

In 2023, two major insurance firms in the UAE, Royal and Sun Alliance Insurance (RSA Middle East) and National Life and General Insurance Company (NLGIC), merged to form a new brand named Liva. This merger is considered a significant event in the insurance industry, representing a substantial shift in the landscape.

• Formation of New Brand - Liva: The merger resulted in the creation of a new brand called Liva, aimed at revolutionizing the insurance industry in the region. This new brand signifies the combined strengths and capabilities of RSA Middle East and NLGIC.
• Scope of the Rebranding: The rebranding effort encompasses companies within the NLGIC Group, including NLGIC, RSA Middle East, and Al Ahlia Insurance Co. SAOC. The rebranding extends across several countries in the region, namely the UAE, Oman, Saudi Arabia, Bahrain, and Kuwait.
• Merger Process and Acquisition: The merger process between RSA Middle East and NLGIC started in July 2022, when NLGIC acquired RSA Middle East from the British group Royal & Sun Alliance Insurance. This acquisition was a pivotal step in the process that led to the formation of the Liva brand.
• Significance of the Merger: The merger of RSA and NLGIC to form Liva is seen as a monumental shift in the insurance industry. It represents a transformative change, indicating a trend towards consolidation and strategic realignment in the sector.

This merger is indicative of the evolving dynamics in the insurance sector in the UAE, where companies are increasingly looking at mergers and acquisitions as a strategy for growth, expansion, and increased competitiveness in the market.