Total profits chalked up by the UAE insurance market for 1H2019 amounted to AED1.02bn ($278m) compared to AED1bn (restated) recorded for 1H2018, reflecting a profit increase of 2%.
Badri Management Consultancy, an actuarial consulting firm, notes in its report titled “Performance Analysis of UAE Listed Insurance Companies for the First Half of 2019”, that the highest profit growth of 125% was achieved by United Fidelity Insurance, which moved its financial position from losses to making profits in 1H2019. The biggest profit decline of 80% for the period was recorded by AWNIC.
Room for improvement
In the first six months of this year, insurance companies produced better performance in terms of profits. Only one company of the 29 under review recorded a loss. In 1H2018, three insurers posted a loss.
Investment income contributed in generating profits for some companies. Insurance companies that recorded losses from their underwriting business were able to make profits from their investments.
Badri says that this shows that there is a room for improvement in their underwriting strategies in the market because the primary source for generating profits should be from insurance activities.
The profits of the five most profitable insurance companies amounted to AED630m in 1H2019, accounting for 62% of total profits in the insurance sector.