For the listed insurance market in the United Arab Emirates (UAE), the first half of 2021 has been marked by a notable rebound in profit and overall capital levels, compared with the picture 12 months previously, according to a new AM Best report.
The Best’s Market Segment Report, titled, “Profits and Capital Rebound for Listed Insurers in the United Arab Emirates”, states that the UAE insurance market’s performance as a whole has been resilient to challenging macroeconomic conditions and intense competition.
Overall market premiums written reached AED 15.1 billion for the first half of 2021, growth of nearly 6%. Meanwhile, net profits reached AED 1.14 billion, compared with AED 949 million in the in the first six months of 2020. The growth in operating profits was despite an increase in the market-wide loss ratio, and was indicative of stronger investment performance compared with the first half of 2020.
Market conditions in the UAE remain difficult, particularly in core motor and medical lines, which represent a large part of insurers’ retained portfolios. Underwriting performance for 2020 was boosted by COVID-19 impacts, such as reduced frequency of motor and medical claims, and AM Best is cautious on the outlook for full-year 2021. In particular, the potential for increases in the loss ratio in the second half of the year as claims experience normalises on competitively written business remains an area to watch.
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AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.