Further market consolidation is likely in 2025, especially if those listed insurers currently under regulatory scrutiny for not meeting solvency capital requirements fail to recover within the specified timeframe, Fitch Ratings says in a new report.
The resultant tighter regulation from the Insurance Authority's absorption into the UAE Central Bank has led to more prudent supervision and enhanced market discipline, which Fitch expects to continue.
The insurance industry overall remained profitable despite the unprecedented rains in April, as most weather-related losses were covered by reinsurance policies. However, the resultant increase in reinsurance rates may affect the profitability of smaller insurers in 2025.
Fitch expects continued growth for UAE insurers in 2025 due to a hardening motor and property market, increased awareness of insurance products – particularly motor comprehensive policies following the record rains in Dubai in 1H24 – and economic growth leading to an influx of expatriates. This influx will increase demand for health products as the requirement for compulsory health insurance for expatriate private-sector and domestic workers has been extended to all Emirates, effective 1 January 2025.