Analysis of Q3 – 2022

The overall GDP growth rate is anticipated to expand by more than 6% this year after growing by 3.8% in 2021, supported by a pickup in tourism, building activity, and business connected with Expo 2020 Dubai, according to the International Monetary Fund. With rising worldwide trends, inflation is predicted to average just over 5% this year. According to an ICAEW analysis, the UAE’s GDP growth will drop to 2.7 percent in 2023, although the non-oil sector will rise by 3.9 percent. The insurance sector is thriving as a result of the reintroduction of FDIs, which has caused a boom in business. While some nations are showing signs of healthy recovery, there is still room for some to go up the success ladder, according to the most recent performance indicators.

The aggregate average loss and combined proportion for 2022-Q3 culminate at 60% and 78%, respectively, whereas the weighted average loss and combined ratio for the third quarter of 2022 seem to be 60% and 85%, respectively. This demonstrates that while the loss ratios have remained stagnant, the expense ratios have risen sharply. With the Top 10 companies showing impetus to improve further, the encouraging bounce was accomplished by the resumption of regular business inside the nation.

Net profit is possibly the simplest performance indicator to comprehend. It represents the ultimate sum that is actually significant to shareholders and other stakeholders. It’s interesting to note that profits fell marginally from AED 1.6 billion to AED 1.1 billion in the third quarter of 2022 compared to the third quarter of 2021.

Majority of companies posted a loss, apart from a few. Profits shrunk by 26.98% in the third quarter of 2022 compared to the same period last year. The ROE numbers for Q3 2022 provide a visual representation of the decrease in earnings.

The insurance firms in the Emirates have earned roughly AED 7.4 billion of the total Net Premiums as of 2022-Q3, which is a little increase from NEP of AED 7.3 billion in 2021-Q3. The net earned premium, however, showed a rise over a year. By producing the most data, conventional insurance firms won the gold in this regard. This indicates that things are looking a lot better in the future and that the declining earnings will soon increase. We can witness that by shedding some light on the GWP figures for Q3 2021 and Q3 2022. Year over year, the GWP statistics increased significantly, with the top 10 insurance providers capturing 80% of the market.

The facts and figures mentioned above do not include Watania due to its recent merger with Dartakaful. Al Khazna had not published their financials for Q3 of 2022 as of the compilation of this report. Hence, they are not included in our analysis. Abu Dhabi-listed Oman Insurance has also changed its name to Sukoon insurance. The change follows Oman’s exit from the Middle East in November 2022.

Overall, the UAE market condition is favorable and is predicted to grow even better. The indices are changing favorably, and the outcomes are already revealing their benefits. It won’t take long for the losses to turn into gains and the firm as a whole to expand. The above remark may be accepted as reality rather than fiction because the UAE economy is already flourishing.