News MiddleEast11 Jan 2018

UAE:Rosy profit growth estimated for 2017 for insurers

| 11 Jan 2018

Profit growth of the UAE insurance industry is expected to have been significant last year because of a decline in the number of major accidents, especially from fire, according to the Emirates Insurance Association (EIA).

The EIA Secretary-General, Mr Fareed Lutfi, said that last year the sector also witnessed major changes that supported its growth, both in terms of premiums and profits, reported DOT Emirates. These changes include new motor regulations introduced by the UAE Insurance Authority providing increased insurance cover, as well as Dubai's mandatory health insurance scheme which was first rolled out in 2014 and fully implemented last year.

Consolidated earnings of 30 insurance companies listed on the Abu Dhabi and Dubai Financial Markets reached AED1.2 billion (US$327 million) during the first nine months of 2017, a growth of 79.6% compared to AED668 million in the corresponding period of 2016.


Meanwhile, the UAE insurance market is forecast to reach US$18.1 billion in 2021, registering a CAGR of 12.1% from 2016, according to Alpen Capital.

The non-life segment is estimated to grow at the fastest pace of 13.9% in the region led by the introduction of new vehicle insurance tariffs in 2017, mandatory health cover, population growth and large-scale project developments ahead of the Expo 2020. The motor insurance line is set to benefit from the upward revision in pricing and the property insurance business line is gaining demand after recent incidences of fire in high-rise buildings.

The UAE is the largest insurance market in the GCC, driven by a well-diversified economy, a growing population, introduction of new forms of insurance and an overhaul of the regulatory environment.

The insurance industry registered GWP of US$10.2 billion in 2016, translating into a CAGR of 9.5% from US$6.5 billion in 2011. After registering a strong increase during 2012 to 2015, the growth slowed down in 2016 due to the challenging economic conditions. The trend was a reflection of weakness in both the life and non-life insurance segments.

Non-life insurance forms the largest part (over three-fourths) of GWP in the UAE. However, in terms of annualised growth between 2011 and 2016, life insurance premiums grew at a faster rate of 13.9% compared to 8.3% in the non-life segment. The robust growth in the life business is supported by demand from the expanding expatriate community and issue of single premium investment products through banks.

Medical and accident & liability are the main insurance lines collectively accounting for over 80% of the non-life insurance market and more than 60% of the total insurance market in the country.

The insurance sector in the Emirates is fragmented and highly competitive with the presence of 61 insurance providers, comprising 34 local and 27 foreign companies. Of the local players, 11 firms offer takaful.



| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News

Follow Asia Insurance Review