International insurer
Zurich began phasing out its general insurance products in the Middle East on Monday.
A recent review by the company found that while the Middle East remains an attractive market, there was limited potential for the general insurance business to profitably grow within the region and achieve an operating scale that warranted continued investment.
Zurich will effectively exit its general insurance businesses by the end of 2016 or as soon as possible thereafter and as a result a number of jobs “will change or cease to exist,” though the company said “it is unclear at this stage how many roles will be affected.”
The company remains committed to its life insurance products however, and said the Middle East will remain one of the key markets for Zurich 's Global Life offering.
And no wonder. Research released by insurer Friends Provident International, found that 48% of UAE residents do not have life or critical illness insurance cover.
A total of 20% that did not have cover said they did not buy it because it is not mandatory, while 40% cited cost as a major obstacle to purchase. The remaining 40% were not even familiar with the concept of a life insurance product.
The Middle East remains an attractive market for many insurers both within and without the life sector however. Earlier this month, the London Market pointed to the growth of commercial Shariah-compliant products as an important example of the innovation required by London to maintain its position as a global insurance hub.
James Bagshawe, a member of the executive committee of the recently established Islamic Insurance Association of London (IIAL) and COO of UK-based Cobalt Underwriting, told Insurance Business that Islamic financial activity in London is developing a growing maturity and said the IUA and IIAL are cooperating to support the trade in Islamic insurance, promoting standards and transparency. Initially the London Market will focus on serving domestic interests and those of Muslim states, where it foresees plenty of opportunity, but also hinted that there is expected to be considerable interest in North America and Canada too.
