DFSA Business Plan 2025-2026: Insurance Sector Focus

      The insurance sector in the Dubai International Financial Centre (‘DIFC’) has experienced significant growth, driven by the expansion of both underwritten and brokered business.

      The centre’s increasing appeal to new entrants, particularly in reinsurance, has bolstered capacity and risk coverage, supported by a stable legal and regulatory environment and access to a skilled talent pool.

      However, as the market evolves, so does the Dubai Financial Services Authority’s (‘DFSA’) scrutiny. The regulator is sharpening its focus on insurance firms’ risk management and compliance practices as part of its risk-based supervisory approach for the 2025-2026 period. The DFSA will closely monitor firms to ensure they have robust frameworks in place for underwriting, reserving, and operational resilience, with particular attention paid to stress event readiness and firms managing insurance monies.

      Insurance firms that fail to comply with DFSA’s rigorous expectations may face significant regulatory penalties, reputational damage, and operational disruptions. This is why it is imperative that firms take proactive measures to align with DFSA standards, before it’s too late. Enhanced board oversight and the establishment of clear risk mitigation strategies will be crucial in ensuring ongoing compliance.

      A central priority for the DFSA will be the integration of environmental, social, and governance (‘ESG’) factors into firms’ strategic decision-making, risk appetite, and product development. The DFSA is committed to driving sustainable finance within the DIFC, and firms must demonstrate their understanding and adherence to ESG standards. Ignoring these requirements could lead to regulatory sanctions or a loss of business from ESG-conscious clients.

      The DFSA’s data-led supervision and thematic reviews will continue to evolve, focusing on identifying key risks while maintaining a low-burden approach for compliant, low-risk firms. However, for firms that do not meet compliance expectations, the DFSA’s more intensive reviews may result in severe scrutiny and potential enforcement action.

      Preparation is key. The DFSA will expect insurance firms to have up-to-date documentation, robust policies and procedures, and strong internal controls. Regular self-assessments, effective staff training, and clear governance structures will be essential in proving a firm’s commitment to compliance. Firms failing to take these steps could find themselves unprepared for a DFSA inspection, which could have costly consequences. Firms should also conduct periodic scenario analysis to test their resilience against regulatory changes.

      As a trusted compliance consultancy, Waystone stands ready to support your business through these challenging times. Our team of experts can assist with policy creation and review, deliver tailored training sessions, and help your firm prepare for DFSA inspections with mock inspections. We ensure your documentation is up-to-date, your internal controls are robust, and your staff is fully trained to meet regulatory requirements.

      Take proactive measures; partner with Waystone today to ensure your firm is fully prepared to pass DFSA inspections and safeguard your business against potential penalties.

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