Today's Edition
YOUSSEF AL ARABI (ABU DHABI)
National insurance companies have increased their shares of the UAE’s total written premiums, jumping from 63.3% to 71.4% over five years, according to data from the Central Bank of the UAE (CBUAE). The proportion of shares saw a gradual increase over a period of three consecutive years, beginning with a 63.3% figure in 2018, increasing to 66% in 2019, and steadily growing to approximately 68.4% in 2020. The figure remained at 68.3% in 2021, before stabilising at 71.4% in 2022.
The country’s insurance companies also increased their shares in terms of property and liability insurance, with total national insurance companies’ shares increasing from 77.8% to 81.6% over five years. In 2019, these companies held 79.9% of property and liability insurance premiums, increasing to 81% in 2020, and remaining around 80.8% in 2021, ultimately reaching 81.6% in 2022.
Regarding personal insurance and fund formation, the nation’s insurance companies increased their shares of this type of premiums from 25% to 33.9% over the same five-year period, according to the CBUAE data. In 2019, these companies held 26.5% of these premiums, increasing to 29.1% in 2020, 32% in 2021, and finally 33.9% in 2022.
The third quarter (Q3) of 2023 saw the continuation of tangiable growth in the UAE’s insurance sector, reflected by an increase in the number of insurance policies and a growth in total written premiums.
At the end of Q3 2023, the number of licenced insurance companies in the UAE remained at 60 companies, consisting of 23 traditional national companies, 10 cooperative national companies, and 27 foreign companies. During the same timeframe, the number of insurance-related professions remained at 491.
Total written premiums increased by 14.4% annually at the end of Q3 2023, reaching Dh42 billion, attributed to a 22.6% annual rise in health insurance premiums, a 13.7% annual increase in property and liability insurance premiums, and a 7% annual decrease in personal insurance and fund formation premiums, mainly caused by a decrease in life insurance premiums.
Paid claims and the total amount of claims paid for all types of insurance programmes increased by 23.5% annually, reaching Dh23.1 billion at the end of September 2023. This is primarily due to annual increases in claims of 9.6% paid for property and liability insurance, 22% in health insurance claims, and 11.1% in personal insurance and fund formation claims.
Total technical provisions for all types of insurance increased by 9.0% annually to reach Dh75.0 billion at the end of September 2023, compared to Dh68.8 billion the previous year. The size of the assets invested in the insurance sector reached Dh74.4 billion, representing 56.5% of total assets, at the end of the third quarter of 2023, compared to Dh72.2 billion, representing 61.1% of total assets, at the end of September 2022.
The percentage of amounts retained from written premiums for all types of insurance reached 52.5% (Dh22.0 billion) at the end of September 2023, compared to 51.2% (Dh18.8 billion) in the previous year. Capital requirements likewise increased, with the ratio of private funds to minimum capital requirements reaching 349.8% at the end of Q3 2023, compared to 325% in the previous year. This is largely due to an increase in qualified private funds required to meet minimum capital requirements.
The ratio of private funds to capital requirements for financial solvency increased to 207.3% at the end of September 2023, compared to 203.6% at the end of Q3 2022, due to an increase in the qualified private funds necessary to meet the financial solvency requirements.
At the same time, the ratio of private funds to the minimum guarantee funds reached 310.6% at the end of Q3 2023, down from 323.1% at the end of September 2022, due to a greater increase in minimum guarantee funds than private funds.
In terms of profitability, total net profit increased to 12.1% of total written premiums at the end of Q3 2023, compared to 8.4% in the previous year. The average return on assets increased to 0.6% at the end of September 2023, compared to 0.4% at the end of Q3 2022.
