GCC:Earnings of listed insurers slide in 1Q2025 on underwriting volatility & lower yields

Listed GCC insurers saw overall earnings decline in 1Q2025, with net profits slipping by 1.4% to $628m from $637m in 1Q2024, according to a report by research and consulting firm Insurance Monitor and Lux Actuaries and Consultants.

The report, titled 'Q1 2025 Performance Periodical' says that the dip in net profits was driven in part by lower investment income. Total investment income dipped by a marginal 1.9% overall. However, excluding the top three UAE insurers, investment income fell by 3.1% for the remaining insurers in the UAE, and by 5.9% across the rest of the region.

37 insurers registered lower profits or reported losses during the first quarter of the year.

Other highlights in 1Q2025 include:

• Despite a moderately conservative allocation (41% in deposits), 41 of 76 GCC insurers reported lower investment income, largely due to equity market volatility.

• UAE and Oman saw improved net combined ratios (NCR), helped by rate corrections post last year’s extreme weather alongside a relatively benign claims environment in 1Q2025.

• Saudi Arabian insurers were under pressure as aggressive pricing pushed the motor segment’s NCR up to 105%, from 91% in 1Q2024.

• Revenue growth was 7% led primarily by the UAE with a 21% rise in premiums. Oman’s 10.5% growth was largely attributable to LIVA, whose book was predominantly UAE-based (62%). QATi (Qatar Insurance Company) also continued its pivot to the GCC, now writing 46% of business in the region, up from 11% in 2022.

• UAE insurers made progress in addressing losses and solvency deficits – Insurance House, Salama (Islamic Arab Insurance Company), Union and ASNIC (Al Sagr National Insurance Company).