All About Starting an Insurance Company in the UAE

With the influx of people from various backgrounds and talents to the UAE, the insurance market is also seeing a boom in the Emirates. With a projected value of US $17.9 billion by 2028 and a CAGR of 4.9%, it is only expected to grow further. 

The UAE currently has the largest insurance market in the entirety of the Gulf Cooperative Council (GCC), with its shares increasing from 44.6% in 2021 to a whopping 46.5% in 2026. If you’re someone who understands risk management and wishes to tap into the insurance sector, there is no riper time than the current market. 

In the past few years, the UAE’s insurance market has undergone a lot of regulatory as well as system and process modifications. But if you’re still reading, then read ahead to see what starting your own insurance business might entail.

Insurance in the UAE: Regulations

Every jurisdiction in the UAE comes with its own set of regulations; with regards to insurance, it is the Insurance Authority (IA) that is responsible for issuing licences and enforcing regulations. It is one of the biggest federal bodies governing insurance, along with the Central Bank of the UAE (CBUAE) and the Department of Economic Development (DED).

While the CBUAE oversees all kinds of financial institutions, including insurance companies, the DED is the entity that grants the initial trade licence for your company. So, when you begin the initial processes of your company, you are going to be approaching the DED.

Types of insurers allowed in UAE

There are many insurers who are legally authorised to conduct activities in UAE, some of the insurers are as follows: Adjusters for any loss or damage, insurance companies, actuaries, insurance agents, insurance consultants, insurance brokers etc.

Types of insurance activities allowed in UAE.

The various activities that are allowed by the authority in UAE include the following: 

• Health insurance activities
• Vehicle insurance activities, 
• Accidents and liabilities insurance activities, 
• Public liability insurance activities, 
• Credit and savings insurance activities, 
• Fire insurance activities,
• Building and contents insurance activities,
• Insurance agency,
• Insurance broker,
• Mechanical breakdown insurance activities,
• Insurance activities related to transportation, 
• Insurance activities related to personnels,
• Home insurance activities, 
• Life insurance activities etc.

Business Structure Setup in Your Chosen Emirate

Since the UAE is a federation of seven Emirates, you might wish to look into each Emirates’ regulations in the insurance sector so as to know the best option for setting up your company. 

The most popular places are usually Abu Dhabi, known for its robust financial sector, and Dubai. If you’re planning to base your business in Dubai, then you might want to consider free zones like the Dubai International Financial Centre (DIFC). 

When we talk about business structure, it basically also includes the legal structure of your company, which means you also need to decide if your company is going to a Limited Liability Company (LLC) or a branch office of your already established company overseas. 

Set Your Insurance Company from the Ground Up

With the legalities and licensing proceedings done, now it’s time to set up your actual business. One crucial thing that you might need to understand is that there is no escaping technology, so the more tech you use in your business to automate the processes, the more streamlined your business is going to be.

With that said, let’s dive into what’s next in your business setup process! 

There are some common steps that the entities must follow to keep their insurance company afloat in the market. The procedures include the following steps:

Registration of the trade name of the company

The entities must get their trade name registered by the DED, which is the first step to be followed. Getting a trade name is one of the most important processes when starting any business.

Licensing and approvals

The first thing you need to do here is write a detailed application to acquire that licence in the Emirate that you wish to set up shop in from the DED. This should include your detailed business plan outlining your company’s vision, target market, insurance products, and risk management strategies. 

You will also need to acquire an insurance licence from the Insurance Authority (IA); along the same lines, you need to submit your business proposals, team structure, and more. 

There are actually three types of licences that you can acquire from the IA:

• Life Insurance: This covers life events like death, injury, or any form of disability. 
• Non-Life Insurance: This covers all risks like property damage, vehicle accidents, or medical emergencies. 
• Reinsurance: This is to provide protection against large insurance claims.

Formulating an LSA agreement

A local service agreement, or LSA, is a contract that is to be drafted after getting initial approval from the DED. Based on the requirements of the entity, the LSA can be devised in either Arabic, English, or both. If both languages are used, then a legal consulting firm has to legalise the notary public.

Getting the court agreement

After the completion of the MoA, all the spouses and the native partners must show up in court to get the agreement notarized in the presence of the court representative.

Meeting your capitalization requirements

When you are applying for the insurance licence from the IA, there will be a minimum paid-up capital requirement that you need to fulfil, depending on the type of insurance licence you are seeking. 

Make sure to contact a business setup consultant to help you navigate these processes for a smooth beginning to your venture.

Get all the documents sorted.

The next step includes the maintenance of all the documents and sending them to the DED to acquire the payment voucher. The documents include the following:

• Payment receipt for the DED trade licence
• A completely filled-out application form
• Copy of the trade licence
• A copy of the visa and the passport
• List of all the business partners
• Agreement of the LLC
• The commercial register

Get your office space and team

Most customers prefer insurance offices to have a physical presence. This means you need to establish a physical presence to build that trust with your potential clients. 

Some free zones might also offer co-working spaces for the same as a more cost-effective option. 

Additional steps for a successful insurance company

There are a couple other things that you might wish to keep in mind when you are venturing into the insurance business. 

• Keep up with technology and niche down.

Every sector is now automating processes with technology for efficient policy management, customer support, claims management, and customer relationship management as well. The more you embrace technology, the longer you stay in the game. 

As for niching down, if you want to be an expert in your field, identify a specific segment of the UAE’s population and tailor your insurance policies and products to their needs. 

• Be Customer-centric

Offering transparent customer claims support and relationship management is one of the ways you stay true to your customers, stay responsive, and build trust in the process as well.

Conclusion

With the UAE’s insurance sector poised for significant growth in the future, insurance entrepreneurship is definitely on the rise. Factors like rising disposable income, increasing awareness of financial security, etc. are promoting insurance penetration.

By building a well-structured, customer-centric, and technologically modern insurance company, you can tap into this market and, with ideal business ethics, go way ahead in the game. 

CDA to Help Your Insurance Venture

Suppose a scenario where you have previously offered life insurance to people but are now trying to venture into the non-life insurance sector too but don’t know how to go about it. Here are two things that can happen: either you spend your precious resources trying to figure out the entire ordeal yourself.

Or, you can outsource the same tasks to professionals who have expertise in the same domain. At CDA, seasoned professionals take care of your business setup and help you get the necessary licences and approvals in any of the seven Emirates. Other than that, CDA can also help establish your branch office for your overseas established insurance business as well!

And that’s how you can afford to strategise and plan on starting an insurance company in the UAE without being bothered about the heavy lifting.