With certainty
Figures from UAE insurers reveal that 2017 was a good year for the sector as a whole, with companies posting healthy top-line growth, improving operating profits and recording stronger shareholders’ equity, thanks to the health and motor segments.
dubai — Preliminary figures from the UAE’s insurers revealed that 2017 was a good year for the sector as a whole, with companies posting healthy top-line growth, improving operating profits and recording stronger shareholders’ equity.
Listed UAE insurers’ net income for 2017 increased to Dh1.3 billion from Dh900 million during the previous year, marking yearon-year growth of 45 per cent, S&P said in a note.
Only three of the 29 insurers reported losses in 2017, reflecting that the overall market conditions are favourable.
UAE insurers’ total revenues rose by 16 per cent to Dh22 billion in 2017, boosted by compulsory medical insurance and the unified motor insurance policy, it said.
“We believe the last phase of compulsory medical insurance in Dubai and the introduction of the Unified Motor Insurance Policy [with increased tariffs] have contributed toward this increase. We note that of 29 insurers, 22 recorded premium growth while only seven saw a decline in their premium levels,” said Sachin Sahni, credit analyst at S&P Global Ratings.
Sahni considers these improved results as a positive factor for the overall market. “That said, we do not see any immediate ratings impact on the UAE insurers that we rate, and credit conditions for each insurer may vary according to their individual performance.”
The market’s overall underwriting profits grew by 61 per cent to Dh2 billion in 2017 from Dh1.3 billion in the previous year.
Combined shareholder equity also increased by five per cent to Dh16.5 billion in 2017 as against Dh15.6 billion in 2016.
According to S&P, Orient Insurance not only contributed heavily to growth of the top five insurers but also became the No.1 insurer by gross premiums, registering a staggering 51 per cent in its premiums.
However, he noted that the UAE insurance market is still highly concentrated, with the top five insurers’ market share rising to 59 per cent last year as against 56 per cent in the previous year. This highlights that large players are getting bigger, with the remaining 25 insurers sharing 41 per cent of the market.
— waheedabbas@khaleejtimes.com