UAE: Intense price competition erodes listed insurers' profitability in 2022
Source: Middle East Insurance Review | Apr 2023
The insurance market in the UAE reported a marked deterioration in underwriting profitability in 2022, noted AM Best.
In the rating agency’s opinion, this largely reflects the highly competitive market conditions and continuous pricing pressures, particularly in the core motor and medical lines, which account for a large proportion of retained risk in the market.
The market segment Report, “Intense Price Competition Erodes Profitability of United Arab Emirates-listed Insurers in 2022”, noted that listed national insurers in the UAE produced lower aggregate profits in 2022, despite the notable increase in gross written premiums of over 10%.
The market generated an aggregate return on equity (ROE) of 7.9%, materially below the return of 10.3% in 2021, and the average of 9.6% for the five years to 2021.
The five largest insurers performed better, with an average ROE reported of 11.4%, while all other segments underperformed the market average.