Several Islamic insurers in the United Arab Emirates are seeking guidance from the UAE Insurance Authority on the possibility of mergers and acquisitions in the sector, Ibrahim Al Zaabi, director-general of the authority, told Reuters on Monday.

Talks are at an early stage, he added without naming any of the companies. The authority regulates the insurance industry.

Hopes for consolidation in the Gulf's crowded Islamic insurance (takaful) market were raised last week when Bahrain Kuwait Insurance Co, Bahrain's largest insurer, said it had raised its stake in local peer Takaful International to 40.9 per cent.

Zaabi also said a committee to oversee Islamic insurance would be established in the UAE by the end of this year to help standardise the sector.

The committee will monitor takaful providers as well as the products they offer, he said, adding that the composition of the body was still being finalised but it would be made up mainly of people operating within the UAE's takaful sector.

"We are working on it and planning to bring it out by the end of the year," Zaabi said on the sidelines of a takaful conference in Dubai. – Reuters