UAE insurance sector rebound to exceed 2019 levels

UAE insurance sector rebound to exceed 2019 levels

The UAE’s insurance sector, the largest and among the most profitable in the $26.5 billion GCC insurance market, is on track to exceed 2019 levels in terms of gross written premium thanks to higher economic activity.

Analysts at S&P Global forecast GCC insurers will remain profitable in 2022, but ongoing intense competition, particularly in motor lines, will likely constrain technical results.

“Overall, earnings in 2021 were supported by well-performing capital markets, resulting in stronger investment returns. Increased capital market volatility in 2022 could offset higher interest rates and mean lower returns,” said Emir Mujkic, director, Insurance Ratings, at a webinar.

“We project profitability will only improve in Saudi Arabia this year, where pressure on underwriting is likely to ease. However, we note that this comes from a low base and project the sector’s profitability will remain relatively weak,” said Mujkic.

According to research firm Statista.com, the insurance penetration rate in the GCC is expected to remain far below the global average of 7.4 percent until 2026. The insurance penetration rate is the gross written premium measured as a percentage of the gross domestic product. The market size of the GCC insurance industry is expected to increase from $26.5 billion in 2021, to $31.1 billion