UAE insurance sector is trekking the path of sustainable growth

UAE insurance sector is trekking the path of sustainable growth

Central to this transformation is the adoption of the International Financial Reporting Standard 17 (IFRS 17), which shifts financial reporting from general written premiums (GWP) to ‘insurance revenue’. This change resulted in a remarkable 17 per cent increase in insurance revenue for the leading players in the country, reaching Dh22 billion as of end Q3-2023, aligning with COP28's objectives of economic transparency and sustainability.

Despite the momentum, the industry faces challenges. The rise in credit risk, marked by increasing expected credit losses (ECL), and a 14 per cent decrease in insurance service results - indicating a dip in underwriting profits - highlight the complexities of the market.

These challenges are set against the backdrop of robust overall financial health, with a 19 per cent growth in profit before tax, totaling Dh1.5 billion, and a notable 29 per cent surge in earnings among the Top 5 UAE insurance companies.

The sector has seen important policy developments, including the end of up to 50 per cent discounts on motor rates offered during the pandemic. This move towards more sustainable pricing structures is essential for the industry's and consumers' long-term benefit, ensuring that insurance companies maintain a stable financial model.

This policy change