The credit rating agency AM Best said that the UAE insurance market maintained its great momentum, achieving profit growth for the third year in a row, noting that companies in the UAE enjoy good capitalization and have the ability to absorb additional underwriting risks.
The company added that the initial disclosures of the national insurance companies listed on the Dubai Financial Market and Abu Dhabi Securities Market revealed an improvement in overall performance, in addition to good growth in installments, while shareholders' equity amounted to 17.5 billion dirhams in 2019, up from 16.5 billion dirhams a year the previous.
Financial performance
In a report on the financial performance of insurance companies in 2019, she stated that underwriting revenue in 2017 and 2018 benefited from improvements in the pricing and insurance system as a result of organizational changes in the major business areas of auto and medical insurance, noting that the decline in underwriting profits in 2019 Indicates pricing pressures.
She explained that the net profits of the listed insurance companies witnessed a strong increase by 21.2% to 1.6 billion dirhams in 2019, which means that the companies benefited from strong investment returns, pointing out that the listed companies achieved total written premiums amounting to 23.7 billion dirhams, with growth rates of 8.3%.
new system
The company said that in October 2018, the Ministry of Human Resources and Emiratisation began applying the new insurance system to the employment registered with it, and this was a major driver in increasing market premiums, as this product protects resident workers from the failure of employers to fulfill their contractual obligations.
She added that the system has the potential to achieve between 500 million dirhams and one billion dirhams, as an additional value for the sector, in addition to increasing portfolio diversification.
She pointed out that, given the size of the UAE insurance market, it will be attractive to a number of regional and international insurance companies, especially those that have an interest in medical insurance, and as a result, it is expected to see acquisitions, and this may allow local insurance companies to increase their capabilities.