The Central Bank of the UAE (CBUAE) announced that the UAE insurance sector continued to grow in Q1 2024, reflected by the increase in gross written premiums.
According to the CBUAE’s Quarterly Economic Review for June 2024, the number of licensed insurance companies in the UAE remained at 60, comprising 23 traditional and 10 takaful national companies, and 27 foreign companies. The number of insurance-related professions increased to 500.
The #CentralBankUAE today released its 2023 Annual Report which provides an analysis of financial and economic developments domestically, regionally and globally in addition to detailing the CBUAE’s actions, strategic developments and progress delivered during 2023.
To view the…
— Central Bank of the UAE (@centralbankuae) June 13, 2024
The report stated that the gross written premiums increased by 18.5 percent year-over-year (YoY) in Q1 2024, reaching AED21.1 billion ($5.74 billion). This was mostly due to a rise in property and liability insurance premiums by 24.6 YoY, in health insurance premiums by 15.1 percent YoY, and in the insurance of persons and fund accumulation premiums by 15 percent YoY, primarily driven by a hike in group and individual life insurance premiums.
Increase in gross paid claims
Gross paid claims of all types of insurance plans increased by 18.3 percent YoY to AED8.4 billion in Q1 2024. This was mainly driven by the increase in claims paid in property and liability insurance by 47.1 percent YoY, and in insurance of persons and fund accumulation.
Growth in technical provisions and invested assets
The total technical provisions of all types of insurance increased by 6.9 percent YoY to AED78.8 billion in Q1 2024 compared to AED73.7 billion in Q1 2023. The volume of invested assets of the insurance sector amounted to AED72.2 billion (54.8 percent of total assets) in Q1 2024 compared to AED70.5 billion (54.9 percent of total assets) in Q1 2023.
Decline in retention ratio
The retention ratio of written insurance premiums for all types of insurance was 50.2 percent (AED10.6 billion) in Q1 2024, compared to 53.2 percent (AED9.5 billion) in Q1 2023.
Well-capitalized insurance sector
The report explained that the UAE insurance sector remained well-capitalized on an aggregate basis. The own funds to minimum capital requirement ratio increased to 376.9 percent in Q1 2024, compared to 340.6 percent in Q1 2023. The own funds to solvency capital requirement ratio reached 194.8 percent in Q1 2024 compared to 198 percent in Q1 2023, as a result of an increase in own funds eligible to meet solvency capital requirements. However, the own funds to minimum guarantee fund ratio decreased to 301.5 percent in Q1 2024 compared to 309.3 percent in Q1 2023.
Read more: CBUAE’s gold reserves surged to $4.88 billion in January
Improved profitability
In terms of profitability, the net total profit to net written premiums increased to 8.0 percent in Q1 2024, compared to 7.8 percent in Q1 2023. The return on average assets increased to 0.6 percent in Q1 2024 compared to 0.5 percent in Q1 of the previous year.
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