The insurance industry of the UAE ended 2019 with an estimated GWP of AED40bn ($11bn), a growth of 1% from the previous year, with 8% growth in the top-line of listed insurers while foreign insurance branches recorded a 3% decline.
The profitability of the industry, on the other hand, exhibited significant growth of 20% reaching AED2.2bn in 2019 while the listed insurers saw a 5-year high ROE of 10% for the year, according to an analysis by Badri Management Consultancy, an actuarial consulting firm in the Middle East.
The report by Badri, titled “Performance Analysis of UAE insurance companies (including foreign branches) for the year 2019”, also says that the retention ratio in the industry continues to decline, averaging 52% for 2019, as companies became increasingly cautious retaining risks given the prevailing economic uncertainty.
The analysis for 2019 is based on 30 listed insurance companies and 22 foreign insurance branches operating in UAE. The published financial reports of the listed companies and foreign branches, while for Daman and “Not Available” segments, an estimation was applied. The missing segment pertains to foreign branches and local unlisted companies whose financials were unavailable. The total written premium for 2019 of the insurance companies and branches considered in this review is estimated to be AED34.5bn.
Listed insurers
Total gross premium written by the listed insurance companies amounted to AED23.7bn during 2019, depicting a growth of 8% from 2018. The market share of the top five companies in terms of the gross premium was reduced from 59% in 2018 to 57% in 2019. The combined premium of the top 5 companies adds up to AED13.5bn for 2019.
Overall, of the 30 listed insurers, 18 companies displayed an increase in premiums over previous period, while 12 companies saw a premium decline.
Foreign branches
Total premiums written by the foreign branches included in the review for 2019 reached AED10.7bn, as compared to the premium written in 2018 of AED11.1bn reflecting a decline of 3%.
The top five foreign branches of 2019 recorded a combined premium of AED6.7bn, contributing 63% of the gross premium written for branches (2018: 62%).
Source:?Middle East Insurance Review
