Preliminary disclosures published by UAE listed insurers reveal that 2017 was a remarkable year for the sector as a whole, said S&P Global Ratings in its report titled "UAE Listed Insurers' 2017
Financial Results Demonstrate Strong Performance Indicators," published today on RatingsDirect.
S&P Global Ratings has reviewed the performance of UAE listed insurers, which originate almost half of the total gross premiums written in the UAE (note: only 29 out of 30 listed insurers declared their preliminary or finalized results). "Based on our analysis, we consider these improved results as a positive factor for the overall market," said S&P Global Ratings credit analyst Sachin Sahni. "That said, we do not see any immediate ratings impact on the UAE insurers that we rate, and credit conditions for each insurer may vary according to their individual performance."
Highlights of the report include:
- Listed UAE insurers' total revenues rose by 16% to AED22 billion in 201boosted by compulsory medical insurance and the Unified Motor Insurance Policy.
- Actuarial pricing on motor and medical, actuarial verification of technical reserves, and minimum motor tariffs also boosted insurers' performance, with the market's underwriting profits up by 61% and net income by 45%.
- However, the UAE insurance market is still highly concentrated, with the top five insurers' market share rising to 59% last year.
- Additionally, while the rate of increase in shareholders' equity does not match premium growth--indicating a marginal strain on insurers' capital adequacy--solvency regulations coming into effect in early 2018 should keep a check on insurer's capital adequacy and financial strength.
