UAE Insurance Sector Reports Significant Growth With 31.2% Increase In Gross Written Premiums For H1 2024

The UAE insurance industry experienced growth in the second quarter of 2024, as reported by the Central Bank of the UAE (CBUAE). Gross written premiums rose by 31.2% year-on-year in the first half of 2024, reaching AED 35.7 billion. This increase was largely due to higher premiums in property and liability insurance, health insurance, and life insurance.

In the first half of 2024, gross paid claims across all insurance types increased by 34% year-on-year to AED 18.9 billion. The rise was mainly driven by a significant increase in claims for property and liability insurance, which grew by 46.2%, and a substantial rise in claims for persons and fund accumulation insurance, which surged by 150%.

The total technical provisions for all insurance types saw a year-on-year increase of 22.8%, amounting to AED 94.2 billion in H1 2024. Investment assets within the sector reached AED 78.7 billion, representing 50.8% of total assets, compared to AED 72.9 billion or 57.1% during the same period in 2023.

The retention ratio for written premiums across all insurance types stood at 53.1% (AED 18.9 billion) in H1 2024, slightly down from 53.8% (AED14.6 billion) a year earlier.

The UAE's insurance sector remained well-capitalised during this period. The own funds to Minimum Capital Requirement ratio improved to 376% in H1 2024 from 352.4% in H1 2023. However, the own funds to Solvency Capital Requirement ratio decreased to 185.8%, down from 203.4% a year earlier due to an increase in eligible own funds.

Profitability metrics showed a decline with net total profit to net written premiums at 6% in H1 2024 compared to 10.4% previously. Meanwhile, return on average assets increased slightly to 0.7%, up from last year's figure of 0.5%.

Industry Composition

The UAE hosts a total of 59 licensed insurance companies: comprising of traditional national companies, takaful national companies, branches of foreign insurers, and one branch of a foreign reinsurance company operating within its borders.

Additionally, there are currently around 498 professions related to the insurance industry active within the country.

With inputs from WAM