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UAE insurance sector booms in Q4 2023: Gross written premiums up 12.7%

UAE insurance sector continued to grow in Q4-2023: CBUAE
2 Apr 2024 01:24


The UAE's insurance industry capped off a strong year with an impressive growth in the fourth quarter of 2023. The Central Bank of the UAE's (CBUAE) recently published Quarterly Economic Review - Q4 2023 reveals a significant rise in gross written premiums, jumping 12.7% year-on-year (yoy) to reach Dh53.2 billion.

Health and Property Lead the Charge

Health insurance emerged as a major driver, with premiums surging by 16.5% compared to Q4 2022. This growth likely stems from the mandatory health insurance scheme implemented earlier in the year. Property and liability insurance premiums also witnessed a robust increase of 18.9%, reflecting continued strength in these sectors.

However, the report also highlights a decrease in the insurance of persons and fund accumulation premiums by 12.4% yoy. This decline is primarily attributed to a decrease in individual life premiums.

Profitability on the Upswing

The positive trend extends to profitability metrics. The net total profit to net written premiums ratio saw a significant jump, rising from 2.9% at the end of 2022 to 6.5% in Q4 2023. Additionally, the return on average assets also improved, climbing from 0.1% to 0.3% during the same period.

Solid Financial Footing

The report emphasises the UAE insurance sector's continued financial strength. The own funds to minimum capital requirement ratio climbed to 335.7% in Q4 2023, a significant increase compared to 309.3% at the year-end of 2022. Similar positive trends were observed in other key financial ratios, indicating the industry's well-capitalised position.

Number of Insurance Companies Remains Stable

As of year-end, the number of licensed insurance companies in the UAE remained steady at 60. This figure includes a mix of 23 traditional national companies, 10 Takaful national companies, and 27 foreign companies. Additionally, the number of insurance-related professions remained at 491.

Investment and Reinsurance

The volume of invested assets in the insurance sector also grew, reaching Dh76 billion (representing 60.4% of total assets) in Q4 2023 compared to Dh71.4 billion in Q4 2022. The retention ratio of written insurance premiums for all types of insurance was 52.9% (Dh28.1 billion) in Q4 2023, compared to 54.9% (Dh25.9 billion) at the end of 2022.

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