Insurance firms in UAE post robust growth in premium income, profit

Business Sunday 27/August/2017 13:52 PM
By: Times News Service
Insurance firms in UAE post robust growth in premium income, profit

Muscat: Listed insurance companies in the United Arab Emirates (UAE) have posted strong growth in gross premiums written (GPW) and net profits in the first half of 2017, said S&P Global Ratings.
"We believe this growth can be largely attributed to two key regulatory initiatives," explains S&P Global Ratings credit analyst Emir Mujkic, "namely, rate increases in motor insurance, which are the result of a new unified motor policy that the UAE Insurance Authority introduced in January 2017, and the final stage in the implementation of compulsory medical insurance in Dubai, which has increased the number of policyholders under this scheme."
The significant increase in underwriting profitably, particularly in the takaful sector, has also had a positive impact on the market's total net profits. The focus on better net underwriting results comes at a time when investment returns continue to decline. "That said, despite lower investment results, we note that investment returns still play an important part in the overall earnings composition of listed insurers in the UAE," added Mujkic.
While GPW and net income showed strong growth in the first six months of 2017, total growth in shareholders' equity remained relatively flat. Strong premiums growth, combined with unevenly distributed profits, is increasingly putting pressure on the capital buffers of some weaker capitalised insurers in the market. "However, apart from some individual exceptions, we expect overall credit conditions in the UAE insurance sector to remain stable over the next 12 months."