UAE listed insurers’ profits up 6.4%

dubai — The insurance market in the UAE continued its earnings momentum in 2018 to post a second straight year of bumper profits.

Listed companies on Dubai and Abu Dhabi bourses showed material improvements in overall performance, combined with modest premium growth, according to a new briefing by AM Best.

Aggregate underwriting profits for UAE-listed insurers experienced a marginal decline of 1.7 per cent to reach Dh1.7 billion. Net profits, however, showed a strong increase, rising 6.4 per cent to Dh1.4 billion.

“Underwriting returns continue to benefit from improvements in pricing and underwriting discipline as a result of regulatory changes in 2017 in the key business lines of motor and medical insurance. We noted that policies underwritten in 2017 continued to benefit 2018 results, favourably contributing to technical earnings,” said Salman Siddiqui, associate director for analytics at AM Best.

Following two years of strong premium growth in volume and rates, gross written premium (GWP) increased modestly in 2018. Overall, listed insurers generated combined GWP of Dh21.9 billion during 2018, representing an uplift of 0.5 per cent from 2017.

“Despite the strong results in 2018, we expect 2019 to be more challenging. Of prime concern is the softening of rates for motor, which occurred in 2018. Additionally, pricing across all other lines has reduced, driven by the highly competitive market environment. These policies will earn out in 2019 and could lead to technical margin erosion,” said Mahesh Mistry, senior director for analytics at AM Best.