The first half of 2019 saw favourable results for the UAE insurance sector, with significant premium income growth of 9% and profit growth of 2%, says Badri Management Consultancy, an actuarial consulting Firm in the Middle East.
In its report titled “Performance Analysis of UAE Listed Insurance Companies for the First Half of 2019”, Badri notes that total premiums written by the 30 listed insurance companies in 1H2019 amounted to AED13.7bn ($3.7bn), as compared to AED12.6bn in the corresponding period of 2018.
Badri says that based on premium estimations of the past four half-years, the CAGR of the industry from 2016-19 is computed to be 9%. Despite the observable growth, the loss and combined ratios for the industry remained stable at 60% and 90% respectively owing to improved underwriting strategies and increased monitoring by the Insurance Authority (IA).
Badri's analysis shows that the highest premium income growth rate in the insurance market over the last four half-years was 15%, achieved in 1H2017 which was due to the IA imposing minimum and maximum tariffs for motor business that were materially higher than the existing rates and new benefits for the Industry.
Of the 30 insurers, nine are takaful operators. Their contribution to the insurance market grew from 15% to 16% in 1H2019, in terms of premiums.
Listed takaful insurers saw growth in written premiums of 13% from 1H2018 while the gross written premium grew by 8% for conventional insurers. In contrast, net profits for takaful companies experienced a decline of 10% while the profits for the conventional companies grew by 5%.