Listed insurers in the UAE reported combined net profits of AED570 million (US$155 million) in the second quarter of this year, 118% higher than the AED261 million netted in the corresponding quarter in 2015, according to data collected by Orient Insurance.
The data also show that of the 29 insurers listed on the Abu Dhabi Securities Exchange and the Dubai Financial Market, 18 insurers showed net profits in 2Q16, which was the same number as for the corresponding quarter in 2015. However, only 12 showed a net technical profit (2Q2015: 13). In the second quarter of this year, 26 of the insurers reported investment gains compared to 23 in the corresponding quarter last year.
Orient Insurance was the most profitable among the insurers, with net profits of AED199 million in 2Q16. It also led the pack in terms of underwriting profit (AED98 million) and investment income (AED101 million). The insurer reported gross premium of AED1,481 million for the second quarter of this year, ranking second behind Oman Insurance which raked in gross premium of AED2,026 million.
Over the last 18 months, many listed insurers in the UAE have had to absorb a triple hit from the deterioration in underwriting performance due to intense price competition, weakened investment performance, and reserve requirements as prescribed by the regulator, the UAE Insurance Authority.
There are approximately 60 insurance companies in the UAE which leads to a highly competitive environment. However, new regulations are expected to prompt some consolidation.
AED10 = US$2.72