A Watchful Eye

Tell us a little bit about the history to ASCANA’s operations and the decision to establish a Scandinavian-Arabic joint insurance initiative?

The decision to establish a Scandinavian-Arabian initiative in the financial sector was to support the broad-based initiatives introduced by the government of Dubai and the federal government. An insurance company protects its clients from fortuitous and unexpected contingencies and accidents over which they have no control and thereby leave them to focus on their core business and participate in nation building as good corporate citizens.

What are the benefits of operating from Dubai?

There are immense benefits of operating from Dubai. It is the foremost strategic commercial hub dealing in all commercial economic social and sports and leisure activities in the region. The vast growth achieved by Dubai during the past 10 years is a realistic yardstick for economic diversification. As an insurance company, we also support our clients by protecting their assets and covering their liability exposures even when they set up business establishments outside the UAE.

How has the company performed over the past years and what is your development strategy?

As a composite insurer created under a government decree with a paid up capital of AED140 million, we have achieved an impressive record of performance and have established a reputation of integrity, efficiency, and reliable service to our clients. As far as our development strategy is concerned, it is somewhat clouded with uncertainty due to sluggish growth concerning premium income and subdued investment returns coupled with deteriorating underwriting results. Notwithstanding the reduced growth momentum caused by the global recession, it is our endeavor to forge ahead with innovative insurance products, especially in medical and life cover. As the world is struggling hard to come out of the recession and kick-start economic growth, we are striving hard to support construction sector projects through our various engineering insurance coverage products.

How big is Dubai’s insurance market in relation to other economy sectors and how do per capita premium levels compare to the surrounding regions?

The UAE is one of the most robust markets in terms of insurance penetration. Total premiums written by the insurance industry in the UAE are about AED25 billion, which is the highest amongst countries in the GCC region.

What new and customized products have you introduced recently?

We have recently introduced online services to our varied clients on a selective basis, and we hope to expand these services to embrace our full insurance portfolios.

As a result of globalization, deregulation, and international security threats, the insurance industry has gone through a tremendous transformation over the past decade. What key effects from these factors has Dubai Insurance witnessed over the past decade and how do these apply in particular to Dubai?

The insurance industry is not immune from the impacts of globalization. The recent events associated with the Arab Spring have resulted in increasing demand for terrorism and political violence insurance. We are also witnessing increasing demand from our clients in the shipping industry for kidnapping and ransom coverage for crews and vessels following instances of piracy in the Gulf of Aden and Somali coast.

What has been the impact of regulatory changes on the Dubai insurance sector?

While the insurance authority has been trying to bring in more regulations to the insurance industry, we are keen that it introduces them more in line with international standards so as to ensure the solvency of the risk carriers operating in the market and protect the public from indiscreet insurance professionals.

How did the global financial liquidity crisis affect the insurance sector in Dubai?

The global financial liquidity crisis adversely affected the entire global economic activities in general, and Dubai in particular, in a significant way. Insurance premiums were drastically reduced due to the impact. Real growth in premiums came down. The interest rates became low, insurers assets values diminished, and their liabilities increased. There are also concerns about the increasing quantity of receivables appearing on the asset side of the insurers’ balance sheets.