The UAE insurance sector demonstrated notable growth in Q2 2024 in terms of gross written premiums, as highlighted in the Quarterly Economic Review released by the Central Bank of the UAE (CBUAE) and reported by WAM.
In the first half of 2024, gross written premiums surged by 31.2 percent year-on-year, totaling AED35.7 billion ($9.7 billion). This increase was primarily driven by significant rises in property and liability insurance premiums, which grew by 39.4 percent year-on-year, health insurance premiums by 30.7 percent year-on-year, and premiums for personal insurance and fund accumulation by 9.1 percent year-on-year. The growth was largely fueled by heightened group and individual life insurance premiums.
Increase in paid claims
During H1 2024, total gross paid claims across all insurance types rose by 34.0 percent year-on-year, reaching AED18.9 billion ($5.1 billion). This surge was chiefly attributed to a 46.2 percent year-on-year increase in claims paid for property and liability insurance, alongside a remarkable 150 percent rise in claims for personal insurance and fund accumulation.
Growth in technical provisions
Total technical provisions across all insurance categories increased by 22.8 percent year-on-year, amounting to AED94.2 billion in H1 2024. The insurance sectorโs invested assets totaled AED78.7 billion, constituting 50.8 percent of total assets, compared to AED72.9 billion, or 57.1 percent of total assets, in the same period of 2023. The retention ratio for written insurance premiums across all categories was 53.1 percent (AED18.9 billion) in H1 2024, down from 53.8 percent (AED14.6 billion) a year prior.
Capital adequacy and financial health
The UAE insurance sector remains robustly capitalized. The ratio of own funds to Minimum Capital Requirement rose to 376 percent in H1 2024, up from 352.4 percent in the first half of 2023. The own funds to Solvency Capital Requirement ratio reached 185.8 percent for the year ending June 2024, compared to 203.4 percent in H1 2023, reflecting an increase in eligible own funds. Moreover, the ratio of own funds to Minimum Guarantee Fund stood at 286.7 percent in the first half of 2024, down from 308.9 percent in H1 2023.
Profitability trends
Regarding profitability, the net profit to net written premiums ratio was 6 percent in H1 2024, compared to 10.4 percent the previous year. The return on average assets improved to 0.7 percent in H1 2024, compared to 0.5 percent in the same period last year.
Licensed insurance landscape
Currently, the UAE has 59 licensed insurance companies, which include 23 traditional firms, 10 takaful national companies, and 25 branches of foreign insurance firms, along with one branch of a foreign reinsurance company operating in the region.
Additionally, the number of professionals in insurance-related fields has reached 498.
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