GCC: Impact of regional weather-related events in 2Q2024 contained by reinsurers
Source: Middle East Insurance Review | Oct 2024
GCC-listed insurers registered growth of 8% in after-tax profits despite1.1% y-o-y increase in net combined ratio (NCR). Reinsurance largely contained the impact of extreme events, such as record-breaking rainfall in the UAE in April 2024.
In the UAE, the combined pre-tax profit of listed insurers grew at an unexpected 7.1% with a nominal increase in NCR. However, 12 of 26 insurers reported losses or a decline in earnings before tax.
These losses further weakened the position of those in breach of solvency regulations, including TAKAFUL-EM which recorded negative equity of AED52.5m ($14.3m), that collectively accounted for 13% (AED2.3bn) of the 1H2024 revenue of UAE-listed insurers.
Continued losses triggered a third consecutive downgrade for two listed insurers in the past year although no substantial measures to ram up were announced by any insurer other than Takaful Emarat.
Losses amounting to OMR23.8m ($61.8m) impacted Oman’s leading insurer, LIVA, which would have registered an after-tax profit of OMR7.8m if not for setbacks from its UAE operations. Despite the losses, LIVA UAE’s solvency ratio is projected to remain well above the minimum regulatory requirements.
In contrast, several insurers from in Saudi Arabia have raised capital ahead of the YE2024 deadline with one successful completion in July 2024 and three more pending approval from the Capital Market Authority. Two other insurers have also commenced merger evaluation exercises as of July 2024. M