A Brief Overview of UAE’s Insurance and Reinsurance Markets
In contrast to the earlier years, the UAE has been experiencing a lull phase on the regulatory front. There are two main reasons for it.
We must keep an eye on the ongoing developments related to the insurance dispute resolution committees. With time, the committees will produce an increasing number of cases that will give us valuable insights into their governance. Additionally, it will also be interesting to see how the local courts adjudicate these matters. 2022 will be an interesting year because many Covid-19 related cases might see closure.
Although not related to insurance, the notable advancements in alternative dispute resolution may affect insurance professionals. The most remarkable instance is that of bolstering mediation’s flexibility under the new Mediation Law.
In connection with the arbitration, the relevant authorities issued Decree No. (34) of 2021 on Center Dubai International Arbitration (in 2021). This decree abrogated two formidable arbitration centers.
- EMAC (Emirates Maritime Arbitration Center).
- DIFCAI (Dubai International Financial Center Arbitration Institute). The abolishment of the DIFCAI is also supposed to include the DIFC LCIA Arbitration Center.
In accordance with the Decree, all rights and obligations of these abolished centers will be transferred to the Dubai International Arbitration Center (DIAC).
After the issuance of Decree No. (34) of 2021, the rights and responsibilities of the above-mentioned abolished centers will be transferred to the DIAC (Dubai International Arbitration Center).
Insurers that intend to use DIFC LCIA or EMAC arbitration clauses in their policies should consider revising this wording policy in the future while including DIAC arbitration.
Perspective and Conclusion
To begin with, we foresee an active year for insurance regulations. Furthermore, the UAE authorities may issue new guidelines regarding the consolidation of the Insurance Authority and the Central Bank. This merger will facilitate procedural changes, but it will also stimulate organizational productivity. It will be interesting to see how this unification plays out and if it enhances/alters the domestic legal framework.
Technological innovation has a profound impact on every sector and the insurance industry is no exception. We are witnessing countless specialists altering their business operations by combining remote and electronic methodologies (for underwriting and claims management).
Another interesting aspect is the sharp increase in the number of disruptors. Since December 2020, over four price comparisons, websites have procured licenses from the regulator, which is an excellent example of companies deviating from conventional business practices in the UAE.
Technological advancements will also influence insurance risks. We envisage a drastic increase in the volume & type of cyber risks being underwritten in 2022. Also, we need to watch out for political risks this year.
Like all other countries, the UAE has embraced the new reality of the post-pandemic world. On that note, we expect a phenomenal year for the insurance sector. Let the proceedings begin.
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