News Middle East22 Oct 2019

UAE:GWP growth eases in 2018

| 22 Oct 2019

UAE insurance premiums have dropped for the first time in a decade but the market continues to preserve its leading role in the MENA region, according to a report issued at the 16th Gulf Insurance Forum held in Dubai last week.

GWP in the UAE reached AED43.7bn ($11.9bn) in 2018 against AED44.8bn in the previous year, registering a 2.5% decline. Paid claims for the same period reached AED29.4bn against AED27.97bn, a 4.8% increase.

Medical insurance continued to control the largest share of the market with premiums of AED19.1bn in 2018, almost 1.6% lower than 2017. Motor insurance premiums nwitnessed a drop of 11% in 2018 as they totalled AED6.7bn against AED7.5bn in 2017.

The table below shows details of the performance of the different classes of business in 2018:

Market performance 2018-2017 (AED'000)
Lines of business GWP Change % market share 2018 % Paid claims Change %
2018 2017 2018 2017
Motor 6,713,005 7,548,005 -11.06% 15.36% 4,311,039 4,853,439 -11.18%
Fire 2,688,562 2,861,486 -6.04% 6.15% 1,562,389 2,954,385 -47.12%
Engineering, construction and energy 2,345,796 2,208,328 6.22% 5.37% 2,969,735 1,547,106 91.95%
Marine & Aviation 1,326,817 1,235,902 7.36% 3.03% 695,793 707,558 -1.66%
Others 2,050,498 1,822,507 12.51% 4.69% 533,354 402,285 32.58%
Total (P&C) 15,124,678 15,676,228 -3.52% 34.60% 10,072,310 10,464,773 -3.75%
Health 19,083,079 19,392,487 -1.60% 43.65% 15,133,458 14,009,609 8.02%
life and savings 9,510,676 9,755,514 -2.51% 21.75% 4,208,048 3,491,820 20.51%
Total 43,718,433 44,824,229 -2.47%   29,413,816 27,966,202 5.18%

 

Life insurance and savings premiums reached AED9.5bn against AED9.76bn in 2017 showing a drop of 2.5%. Annuities and fund accumulation premiums saw the steepest decline of almost 61% as they reached AED533m in 2018 compared to AED1.36bn in the past year.

The table below shows the breakdown in life insurance business in 2018:

Insurance of Persons & Fund Accumulation 2017-2018 AED'000
  GWP Change % Paid Claims Change %
2018 2017 2018 2017
Group life 699,546 707,922 -1.18% 393,200 391,234 0.50%
Group credit life 750,444 672,954 11.51% 251,676 269,812 -6.72%
Individual life 7,527,491 7,015,725 7.29% 3,463,270 2,827,066 22.50%
Annuities & fund accumulation 533,196 1,358,913 -60.76% 99,902 3,524 2734.90%
Total 9,510,677 9,755,514 -2.51% 4,208,048 3,491,636 20.52%

 

At the Forum, Mr Ebrahim Obaid Al Zaabi, director general of the UAE Insurance Authority (IA), commended the insurance sector in the country for its solid fundamentals . “The role of the insurance industry in the UAE is growing year after year, especially in the recent period, with the IA issuing a bundle of legislation and regulations in line with economic growth and regional and global changes.”

Financial and technical indicators reflect the development achieved by the insurance sector in the country, where it continues to be the largest MENA insurance market for more than 10 consecutive years and jumped one rank globally to occupy the 37th position in terms of GWP. “The insurance density in UAE is twice the global average,” he added noting that growth is expected to continue in 2019 in line with the economic development of the UAE.

The IA is keen on the development of pension and retirement insurance in the country and supports the development of awareness for this type of protection, said Mr Al Zaabi. The total written premiums generated from pension and retirement insurance reached AED117m in 2018, equivalent to 1% of the life insurance branch.

The Workers’ compensation insurance scheme, which was introduced in October 2018, has contributed to strengthening the competitiveness of the UAE business environment, developing businesses and investments, achieving wider coverage of workers' benefits and work-related injuries, and contributing to the spread of insurance protection, said Mr Al Zaabi. Workers' Compensation insurance premiums totalled AED352m in 2018, or 1% of the property insurance branch, with a growth rate of 4% over 2017.

New initiatives

To fulfil the national vision of protecting senior citizens, the IA is undertaking a number of initiatives that will lead to the best insurance services in the UAE. “This includes the initiative to provide health insurance protection for senior citizens after the age of 60 in coordination with the Ministry of Community Development,” said Mr Al Zaabi.

He revealed that the IA is currently working on several initiatives aimed at enhancing the role of the insurance sector and its development, employing RegTech. This includes transition to the next generation of supervision of the insurance sector through the preparation of a digital supervision platform and electronic link with insurance companies and related professions.

The Authority also has a project to establish innovation centres in all insurance companies to promote and develop the innovation ecosystem in the insurance sector, he added.

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