Total gross written contributions chalked up by takaful firms in the UAE increased by 6% to AED3.7bn ($1bn), up from AED3.5bn in 2017, according to Mr Safder Jaffer, managing director & principal for Middle East & Africa at Milliman, a global provider of actuarial and related services.
He said the growth in takaful business offset a decline in sales of conventional insurance players, reported Zawya.
Speaking at the World Takaful and InsurTech Conference in Dubai in April, Mr Jaffer said the combined GWP of the 30 publicly-listed conventional and Islamic insurance firms edged up marginally by 0.5% to AED21.9bn in 2018, up from AED21.8bn in 2017.
“Looking at conventional insurance versus takaful, that 0.5% growth would not have been there,” he said, adding that overall industry growth would have been negative had it not been for the takaful sector.
Takaful operators also managed to remain profitable in 2018, for the second year in a row, bolstered by regulatory changes which set minimum pricing for motor insurance and the introduction of mandatory health insurance for workers in the emirate.
Overall market profits for listed takaful firms in the UAE declined by 6% to AED134m, Mr Jaffer said, which was in contrast to the 8.5% net profit growth achieved by conventional firms, to almost AED1.4bn.
Islamic insurance firms still enjoyed a slightly higher return on equity, though. He said takaful firms saw return on equity move higher to 10% in 2018, up from 9% in 2017, but the overall return on equity for the 30 conventional and Islamic insurers stood at 8.4% last year – a marginal increase on the 8% achieved in 2017. M
AED1 = $0.27