UAE - Insurers to see positive results in 2018
Monday, 01 22 2018, Category: Insurance and Reinsurance, Country: U.A.E
The UAE-based insurance companies are expected to achieve up to 70% increases in net profits during the fourth quarter of 2017 and throughout 2018, financial analysts told Mubasher.
The net profits of 30 insurance firms listed on the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) surged 80% year-on-year to AED 1.2 billion in the first nine months of 2017 after the raising of insurance policies’ prices.
The government decrees on the insurance policy, including Dubai government’s decree to mandate insurance for all of its residents, boosted the sector’s net profit forecasts, said Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities and Investments (CISI).
The Emirati insurance companies will maintain their growth, while major entities in the sector will be keen on acquiring small companies to push up the sector, Al-Taha added, noting that acquisitions will create big companies able to compete in domestic markets and expand globally.
However, the introduction of 5% value-added tax (VAT), which began as of 1 January 2018, resulted in a blurry vision, which may have a negative impact on the insurance sector, Al-Taha commented.
The insurance companies’ net profit will be decreased on the back of imposing the VAT, especially in the first quarter of 2018, Tariq Qaqish, managing director of asset management at MENACORP remarked.
The approaching Expo 2020 Dubai event and the increase in the UAE’s economy will incentivise the sector in the coming years, Qaqish noted.