Austrian composite insurer UNIQA’s
expansion strategy in emerging markets has taken a notable step
forward with the founding of an Islamic Shari’a law-compliant life
and health insurance company in the United Arab Emirates (UAE).
Named Takaful Al-Emarat, the new insurer is based in Dubai and is a
joint venture (JV) between UNIQA and UAE insurer Al Buhaira
National Insurance. UNIQA’s stake in the JV is 15 percent, Al
Buhaira’s 20 percent and other unnamed founders’ 10 percent. The
remaining 55 percent of Takaful Al-Emarat’s capital is to be listed
via an IPO.

“This is a textbook joint venture, in which the specific
strengths of the individual partners complement each other to
create a sum that is greater than its parts,” said UNIQA’s CEO,
Konstantin Klien.

“In view of the announcement of mandatory health insurance for the
expatriates working in the Emirates – that is 80 percent of all
workers – and the high growth potential in life insurance, Al
Buhaira has long been on the search for an international partner
with specific expertise in personal insurance,” he added.

Founded in 1978, Al Buhaira reported gross premium income of AED550
million ($150 million) and a net profit of AED160.7 million in
2007. Al Buhaira has been listed on the Abu Dhabi Securities Market
since February 2005. Primarily a general insurer, Al Buhaira also
offers group life and health insurance products.

As Klein noted, the UAE’s life insurance market presents
significant growth potential. According to reinsurer Swiss Re, life
insurance premium income in the UAE in 2006 totalled only $450
million ($105.90 per capita) and represented a mere 0.28 percent of
GDP. The UAE’s general insurance premium income in 2006 totalled
AED8.66 billion.

The JV partners are also considering expanding Takaful Al-Emarat’s
activities into the UAE’s fellow member countries of the Gulf
Co-operation Council – Saudi Arabia, Bahrain, Kuwait, Oman and
Qatar – where in 2006 combined life insurance premium income
totalled $265 million. Consideration is also being given to
expansion into and other Islamic countries, including those in the
Middle East and North Africa.

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Klien pointed to another positive aspect of the JV: UNIQA will be
positioned to acquire know-how in the area of Islamic products that
can be marketed to its customers in some of the 20 markets in which
it is represented in Eastern and South-Eastern Europe. “These
classes of customers definitely exist, and regardless of any
further regional expansion, experts foresee a rising demand for
such products,” said Klein. “After all, there are roughly 16
million Muslims living in Europe. As a modern company, we must
orient ourselves based on demand and the wishes of our

For UNIQA, its entry into the UAE also marks a new turn in its
geographical expansion strategy that has until now focused on the
emerging Central and Eastern European (CEE) markets of Poland,
Czech Republic, Hungary, Slovakia, Croatia, Slovenia, Romania,
Bosnia, Herzegovina, Bulgaria, Serbia and the Ukraine, and Western
European markets in Italy, Switzerland, Liechtenstein and

Indicative of its strategy’s success, between 2002 and 2007 UNIQA’s
written premium income grew from €2.687 billion ($4.15 billion) in
2002 to €5.259 billion, of which 58 percent was derived from life
and health insurance. During the same period non-Austrian premium
income increased from €307 million (11.4 percent of the total) to
€1.744 billion (33.2 percent), of which 54 percent was generated in
Western Europe and 46 percent in CEE countries in 2007. UNIQA’s
profit before tax grew from €35.3 million in 2002 to €340 million
in 2007.