News Middle East05 Dec 2019

UAE:Insurance Authority says it scrutinises loss making insurers

| 05 Dec 2019

The UAE Insurance Authority (IA) has said it is closely monitoring all insurance companies operating in the country, especially those that have posted financial losses.

The Authority stressed its keenness to ensure the safety of the insurance sector, and the sustainability of insurers, according to a report by Emirates Today.

Industry data show that the sector's results for the third quarter were positive overall, with the combined net profits of national companies amounting to AED1.4bn ($381m).

Among insurers with accumulated losses at 30 September was Takaful Emarat which posted accumulated losses of about AED35.2m, representing 23.5% of paidup capital of AED150m. For the nine months to September, the company posted losses attributable to shareholders of AED17.6m.

In a statement to the stock exchange, Takaful Emarat said that the medical insurance portfolio recorded losses due to reduced margins over the period. Losses were higher than expected. Its 3Q2019 financial statements show that net claims incurred reach AED187m, more than double the AED83.6m posted for the corresponding nine months of 2018.

The company has already taken remedial measures such as reducing its overheads and discretionary expenses. Other actions are in progress such as reviewing underwriting guidelines and loss making portfolios with a view to pricing them appropriately. In the last two years, the company invested heavily in IT, digitising its sales and processes.

The goal of the Authority is to strengthen the protection of investors and shareholders in the UAE's financial markets.

Localisation

The IA added that it is also monitoring emiratisation in the insurance sector. Companies that are not committed to achieving their mandated ratios are subject to fines approved by the Higher Committee for Human Resources Development, pointing out that the percentage of emiratisation in the sector is currently 12%.

 

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