The UAE’s insurance sector exhibited robust growth and stability in the fourth quarter of 2023, supported by an increase in gross written premiums, according to the Central Bank of the UAE‘s quarterly economic review. The gross written premiums saw a 12.7 percent annual increase in Q4 to AED53.2 billion ($14.5 billion). This growth was mainly driven by an increase in health insurance premiums and property and liability insurance premiums by 16.5 percent and 18.9 percent, respectively. Meanwhile, persons and fund accumulation premiums saw a 12.4 percent annual decline due to a decline in individual life premiums.
Licensed companies
By the end of 2023, the UAE maintained a total of 60 licensed insurance companies. These companies comprise a diverse mix, including 23 traditional national companies, 10 Takaful national companies, and 27 foreign companies. Meanwhile, the number of insurance-related professions remained at 491.
Increase in gross paid claims
Corresponding to the rise in premiums, gross paid claims across all types of insurance plans in the UAE also increased by 12.8 percent year-on-year, totaling AED31.1 billion by the end of 2023. This increase was mainly due to the increase in claims that companies paid in health insurance (16.9 percent) and property and liability insurance (10.9 percent). Meanwhile, insurance of persons and fund accumulation claims saw a decline of 2.8 percent annually.
Read: UAE’s GDP to grow by 4.2 percent in 2024, rising to 5.2 percent in 2025: Central Bank
Strong financial position
Despite the uptick in claims, the UAE insurance sector remained well-capitalized and financially robust. The total technical provisions of all types of insurance grew by 8.4 percent year-on-year to AED74.4 billion in Q4 2023. Moreover, the sector saw improvements in early warning ratios and risk assessment metrics, with the own funds to minimum capital requirement ratio increasing to 335.7 percent and the own funds to solvency capital requirement ratio rising to 221 percent.
In terms of profitability, the UAE’s insurance sector showed significant improvement, with the net total profit to net written premiums ratio increasing to 6.5 percent in Q4 2023, compared to 2.9 percent in the previous year. Additionally, the return on average assets rose to 0.3 percent in Q4 2023.
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