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Best’s Commentary: Profits Continue to Rise for National Insurers in the United Arab Emirates

February 27, 2020 GMT

LONDON--(BUSINESS WIRE)--Feb 26, 2020--

The insurance market of the United Arab Emirates (UAE) maintained its impressive momentum in 2019 to post a third consecutive year of profit growth.

AM Best’s analysis of the preliminary disclosures of the national insurers listed on the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) found improvements in overall performance, combined with good premium growth.

A new Best’s Commentary titled, “Profits Continue to Rise for National Insurers in the United Arab Emirates”, reveals UAE-listed insurers’ shareholders’ equity reached AED 17.5 billion in 2019, up from AED 16.5 billion the previous year, benefiting from profit generation. Overall, companies in the UAE are well-capitalised and have the capacity to accommodate additional underwriting risk.

Despite gross premium growth of 8.3% in 2019, there was a small decline in aggregate underwriting profits (i.e., premiums less claims) for UAE-listed insurers of 1.1% to AED 1.7 billion.

Salman Siddiqui, director, analytics, at AM Best Europe Rating Services, said: “Underwriting returns benefited in 2017 and 2018 from improvements in pricing and underwriting discipline as a result of regulatory changes in the key business lines of motor and medical insurance. However, the decline in underwriting profits in 2019 suggests pricing pressure and raises concerns regarding medium-term rate adequacy on these lines.”

Although underwriting returns declined, net profits for listed insurers showed an exceptionally strong increase of 21.2% to AED 1.6 billion in 2019, implying that companies benefited from strong investment returns. Overall, the market generated a return on equity (ROE) of 9.5%, above the previous year’s return of 8.0%.

To access a complimentary copy of this special report. please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=294804.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates.ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20200226005941/en/

CONTACT: Salman Siddiqui

Director, Analytics

+44 20 7397 0331

salman.siddiqui@ambest.comCatherine Thomas

Senior Director, Analytics

+44 20 7397 0281

catherine.thomas@ambest.comRichard Banks

Director, Industry Research – EMEA

+44 20 7397 0322

richard.banks@ambest.comEdem Kuenyehia

Director, Market Development &

Communications

+44 20 7397 0280

edem.kuenyehia@ambest.com

KEYWORD: EUROPE UNITED KINGDOM UNITED ARAB EMIRATES MIDDLE EAST

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES INSURANCE FINANCE

SOURCE: AM Best

Copyright Business Wire 2020.

PUB: 02/26/2020 11:00 PM/DISC: 02/26/2020 11:00 PM

http://www.businesswire.com/news/home/20200226005941/en