The UAE-listed insurers posted a profit growth of 76% during the first quarter of 2021 when compared with the corresponding period of 2020, with total pre-tax profits amounting to AED681m ($185.4m) for 1Q2021, according to a report by Badri Management Consultancy.
Of the 29 listed insurers whose financial results were analysed, only two showed losses in 1Q2021. In contrast, nine insurers posted losses in their financials for 1Q2020. The report said that Al Khazna Insurance is excluded from the analysis since the insurer’s 1Q2021 financial results had yet to be published as of the date of compilation of the report.
The five biggest insurers in terms of pre-tax profits in 1Q2021 were: Orient Insurance, Abu Dhabi National Insurance, Oman Insurance, Al Wathba National Insurance (AWNIC) and Dubai Insurance.
In the first three months of this year, the fastest profit growth was generated by Fidelity United (609%) while Al Sagr National Insurance reported the biggest decline of 205%, when compared with the first quarter of 2020.
The report said 1Q2020 was hit by falling equity markets due to the onset of COVID-19 and that is the reason for the large variation in financial performance. The market recovered later during the year. Thus the 76% growth in profit was achieved from a low base in 1Q2020.
AWNIC showed the biggest absolute change in profits. In 1Q2020, the insurer was hit by an AED78m loss in investments. Excluding the 1Q2021 profit growth of AWNIC, the other 28 insurers would have reported a 40% increase in profit in 1Q2021.
The average loss ratio for the 29 listed insurers stood at 59% for 1Q2021, compared to 58% at the end of 2020. The listed insurance companies reported a 1% growth in premium income to AED8.9bn during the first three months of 2021 when compared with the corresponding period of 2020.
The combined premiums of the top five companies amounted to AED5.5bn in 1Q2021, contributing 62% to the overall market. However, this market share has dropped by one percentage point when compared with 1Q2020.
Among the 29 listed insurers in Badri’s analysis, only 11 displayed premium growth while the other 18 experienced a decrease in the topline in 1Q2021. M