Dubai International Financial Centre Bolsters Its Role as an Insurance and Reinsurance Hub

19 Sep, 2023

Dubai International Financial Centre Bolsters Its Role as an Insurance and Reinsurance Hub

The Dubai International Financial Centre (DIFC) has recently welcomed several notable organizations into its fold, including Hensley Wynne Furlonge Partners (Middle East) Ltd, Swan Insurance Management Agency Ltd, Waica Reinsurance (DIFC) Ltd, and YOA Risk Services Ltd. These new entrants join the ranks of prominent industry leaders such as AIG, Zurich, Aon, and Willis, all seeking access to what is regarded as the world's largest untapped market through DIFC.

The newly integrated organizations bring with them a diverse range of insurance and reinsurance offerings, enabling them to expand their presence across the region. These offerings encompass various lines, including transactional risk insurance within the M&A process, medical coverage, personal accident insurance, travel insurance, property insurance, engineering coverage, liability insurance, and marine insurance.

In line with DIFC's vision of driving the future of finance, Virtual I Technologies Ltd, an insurtech company situated in the DIFC Innovation Hub, has achieved a significant milestone. It has become the first insurtech firm to upgrade and secure a regulatory license from the Dubai Financial Services Authority (DFSA). Virtual I Technologies Ltd has developed an AI-based risk assessment tool and is now transitioning into a new growth phase, aiming to become a capacity distributor through a digital gateway platform connecting capacity providers, global agents, local agents, and retail brokers.

Over the past five years, DIFC has witnessed a substantial influx of insurance and reinsurance players, with a notable 43 percent representation of Managing General Agents (MGAs) originating from Africa, Asia, Europe, and the Middle East. This influx has contributed to a thriving $2.1 billion insurance market within DIFC.

As a market creator, DIFC has meticulously crafted a globally recognized regulatory environment, offering strategic, financial, and operational advantages for reinsurers, brokers, independent MGAs, as well as Lloyd's service companies and coverholders. Additionally, favorable factors such as robust oil prices, increased infrastructure investments, and low insurance penetration rates in the region have positively influenced the reinsurance market within DIFC.

Arif Amiri, CEO of DIFC Authority, expressed his delight at the steady stream of new insurance and reinsurance companies that have joined DIFC during the first nine months of 2023, with the center on track for an impressive 20 percent annual growth rate. He highlighted that DIFC is currently home to more than 100 registered insurers, reinsurers, captives, and insurance-related entities, all leveraging the platform to pursue their growth ambitions. Amiri emphasized that DIFC's world-class laws and regulations are on par with those of advanced global markets, providing insurers and reinsurers with the confidence to operate within the jurisdiction and tap into new growth opportunities in the region.

DIFC has played a pivotal role in advancing the insurance and reinsurance industry over the past two decades. This includes its co-hosting of the Dubai World Insurance Congress, a significant forum for addressing critical issues and opportunities in the sector. The 2023 edition of the event saw over 1,100 industry professionals from 60 countries convening to discuss topics such as promoting economic growth, attracting talent to the insurance industry, embracing technological advancements, and supporting initiatives related to climate change and decarbonization.

An independent survey conducted during the Congress provided encouraging insights, with 87 percent of respondents expressing confidence in the MEASA (Middle East, Africa, and South Asia) market and recognizing the strategic opportunities it offers. The survey also underscored the immense potential within property insurance, health insurance, energy insurance, cyber insurance, and liability insurance lines of business in the MEASA region. Reflecting the growing sophistication of insurance markets and the rising demand for insurance and reinsurance, the survey revealed that 85 percent of respondents were confident about 2023 renewals and the prospect of retaining client