UAE insurance sector continued to grow in Q3 2023, as reflected by the increase in the number of insurance policies in line with the increase in the gross written premiums (GWP), the Central Bank of the UAE (CBUAE) has said.
As of Q3 2023, the UAE had 60 licensed insurance companies, including 23 traditional national companies, 10 Takaful national, and 27 foreign companies. The sector employed 491 insurance-related professionals during this period.
GWP rose 14.4% year-on-year (YoY) to Dh42 billion by the end of Q3 2023, primarily driven by a 22.6% YoY increase in health insurance premiums and a 13.7% YoY increase in property and liability insurance premiums.
Total gross paid claims across all insurance plans grew by 23.5% YoY to Dh23.1 billion by September 2023. This increase stemmed mainly from rises in property and liability insurance claims by 9.6%, health insurance claims by 22%, and insurance of persons and fund accumulation claims by 11.1% YoY.
According to the report, total technical provisions for all types of insurance increased by 9% YoY to Dh75 billion by September 2023 compared to Dh68.8 billion a year prior.
The insurance sector’s invested assets amounted to Dh74.4 billion (56.5% of total assets) by the end of Q3 2023, slightly up from Dh72.2 billion (61.1% of total assets) in September 2022.
The retention ratio of written insurance premiums reached 52.5% (or Dh22 billion) by September 2023, compared to 51.2% (or Dh18.8 billion) a year earlier.
Regarding capitalisation, CBUAE reported that the own funds to minimum capital requirement ratio increased to 349.8% by the end of Q3 2023 from 325% a year earlier. Similarly, the own funds to solvency capital requirement ratio rose to 207.3% by September 2023 compared to 203.6% in Q3 2022.
However, the own funds to minimum guarantee fund (MGF) ratio decreased to 310.6% by the end of Q3 2023 from 323.1% in September 2022 due to a higher increase in MGF compared to own funds.
Regarding profitability, the net total profit to net written premiums increased to 12.1% by the end of Q3 2023, up from 8.4% a year earlier. The return on average assets also rose to 0.6% by September 2023 compared to 0.4% in Q3 2022.
