UAE insurers face tougher outlook as earnings pressures rise
Tuesday, 12 29 2015, Category: Insurance and Reinsurance, Country: U.A.E
The UAE’s insurance sector is expected to face a tougher 2016 as the industry is facing increased pressures on earnings and regulatory requirements, according to analysts.
Despite good premium growth, listed insurance companies in the UAE are showing further earnings strain so far this year, according to rating agency Standard & Poor’s. Gross premiums grew 9 per cent year on year to Dh13.5 billion in the first nine months of 2015.
The growing maturity and expansion of the Dubai compulsory health scheme and sustained capital spending is supporting the premium growth in the Industry. “However, underwriting and net earnings show real weakness so far this year,” said Standard & Poor’s credit analyst Kevin Willis.
The 29 listed companies recorded an aggregate net underwriting deficit in the first nine months, representing a 103 per cent net combined (loss and expense) ratio (NCR; the market’s main profitability measure). Some 45 per cent of the listed companies (13 insurers) posted underwriting deficits. Net profits tumbled 90 per cent in the first 9 months of the year compared to the same period last year.