UAE Insurance Sector Records 18.5% Growth In Gross Written Premiums In Q1 2024

The Central Bank of the UAE (CBUAE) has reported continued growth in the UAE insurance sector for the first quarter of 2024. According to the CBUAE's Quarterly Economic Review for June 2024, gross written premiums saw an 18.5% year-on-year increase, reaching AED21.1 billion.

The number of licensed insurance companies in the UAE remained stable at 60. This includes 23 traditional and 10 takaful national companies, along with 27 foreign companies. Additionally, the number of insurance-related professions increased to 500.

Gross written premiums rose by 18.5% year-on-year in Q1 2024, driven by a 24.6% increase in property and liability insurance premiums. Health insurance premiums grew by 15.1%, while premiums for persons and fund accumulation increased by 15%, primarily due to hikes in group and individual life insurance premiums.

Gross paid claims also saw an increase, rising by 18.3% year-on-year to AED8.4 billion in Q1 2024. This was mainly due to a significant rise in claims paid for property and liability insurance, which surged by 47.1% year-on-year.

Technical Provisions and Invested Assets

Total technical provisions for all types of insurance increased by 6.9% year-on-year to AED78.8 billion in Q1 2024, compared to AED73.7 billion in Q1 2023. The volume of invested assets in the insurance sector amounted to AED72.2 billion, representing 54.8% of total assets, up from AED70.5 billion (54.9%) in Q1 2023.

Retention Ratio and Capitalization

The retention ratio of written insurance premiums for all types of insurance was recorded at 50.2% (AED10.6 billion) in Q1 2024, compared to 53.2% (AED9.5 billion) in Q1 2023.

The report highlighted that the UAE insurance sector remains well-capitalized overall. The own funds to minimum capital requirement ratio increased to 376.9% in Q1 2024 from 340.6% in Q1 2023. However, the own funds to solvency capital requirement ratio slightly decreased to 194.8% from 198% over the same period.

Profitability Metrics

In terms of profitability, the net total profit to net written premiums ratio rose to 8% in Q1 2024, up from 7.8% in Q1 2023. Additionally, the return on average assets increased to 0.6%, compared to 0.5% during the same period last year.

The data underscores a robust performance by the UAE insurance sector in early 2024, reflecting strong growth across various metrics despite some fluctuations in specific ratios.

With inputs from WAM