Disasters, climate change, inflation and geopolitical tensions are challenges facing the "sector"
«Emirates Insurance»: Tightening reinsurance companies nominate prices to rise
Khaled Al Badi: The increasing intensity of natural disasters in recent years has cast a shadow on the global and regional insurance markets.
The President of the Emirates Insurance Association, Khalid Al Badi, said that there are four main challenges facing the insurance industry in the region, including climate change, natural disasters, high inflation rates, as well as geopolitical tensions, which creates an urgent need to increase insurance coverage, noting that these challenges make the renewal of agreements with reinsurance companies for the next year difficult, and this would increase prices, but he pointed to the possibility of turning challenges into real opportunities, provided that cooperation, exchange of experiences and increased investments.
This came during the activities of the 28th Conference of the Afro-Asian Insurance and Reinsurance Federation (FAIR 2023), which began its work in Abu Dhabi yesterday, with the participation of more than 800 executives and decision-makers in the global insurance markets.
The conference, hosted by the UAE for the first time and organized by the Emirates Insurance Association, in cooperation and coordination with the Afro-Asian Insurance and Reinsurance Federation, and with the support of the Department of Culture and Tourism represented by the Abu Dhabi Convention and Exhibition Bureau, will discuss the latest developments and developments in the insurance industry at the regional and international levels, the challenges it faces, and the attempt to develop solutions that can be adopted during the coming period.
Al Badi said the main theme of this year's conference revolves around the interesting question: Will reinsurance markets continue to harden? Whether the hardening of the re-market is a temporary phenomenon or can these trends continue in the coming period in light of new developments and challenges, and what are the effects of this tightening on insurance companies at the regional and international levels?
Al Badi explained that the increasing severity and severity of natural disasters in recent years has cast a shadow on the global and regional insurance markets, pointing out that in the face of the increase in these disasters, the reinsurance companies are steadily becoming more resilient and stricter, which necessitates primary insurance companies to reconsider their strategies and design prevention solutions based on technology, techniques and updated data.
He added that the issue of tightening the reinsurance market imposes itself strongly on the course of the conference, pointing out that the issue of tightening the renewal of reinsurance agreements under the current circumstances comes at the top of the challenges that insurance companies will face, with strong indications that renewal prices for 2024 will take an upward trend, especially in some insurance activities, for reasons attributed by major reinsurance companies to the continued geopolitical uncertainty, and the increase in the frequency and severity of disaster losses, and therefore the negotiations to renew refund agreements will not Be easy for next year.
He said that insurance companies in the UAE and the Middle East in general will not be immune to these developments and challenges, but strong companies with a strong financial position will be in a better negotiating position. On natural disasters and their repercussions on insurance companies, Al-Badi said that the world has witnessed in recent years in particular an increase in the number of disasters, explaining in this regard that «catastrophic patterns differed significantly, as we witnessed, for example, but not limited to torrential floods in countries that rarely witnessed rainfall, while climate changes became violent from huge fires, torrential floods, and other natural factors, which affected insurance and reinsurance companies and caused huge losses to them, while Replay companies in particular have tended to reconsider pricing policies and calculate risk."