One company is responsible for half of the “insurance” profits.

One company in the local insurance market accounted for about half of the technical profits (insurance operating profits) at 49%, compared to 51% of the share of 27 other companies during the first quarter of this year, compared to the first quarter of 2021.

Technical profit fell by 39% to 204 million dirhams at the end of the first quarter of this year, compared to 334 million dirhams at the end of the corresponding period last year, and 12 companies out of 28 losses suffered, and the profits of many other companies refused.

Investment profits accounted for more than 65% of the total profits of insurance companies (28 companies listed in the Dubai and Abu Dhabi markets) in the first quarter of this year, compared to less than 35% of the share of technical profits (insurance operations ) profits), while the share of investment gains and technical gains was approximately equal, with 51% and 49% respectively during the corresponding period last year.

While investment profit increased by 14.3% to 392 million dirhams during the first quarter of 2022 compared to the first quarter of 2021, most companies (27 companies) made investment profits compared to one company that suffered an investment loss.

The results of the national insurance companies listed in the local capital markets show an increase in the premiums of companies by about 7% to 9.391 billion dirhams at the end of the first quarter of 2022.

The technical results put pressure on the sector’s overall profitability, which fell by 13% to about 596 million dirhams at the end of the first quarter of 2022, compared to 678.1 million dirhams during the corresponding period of the previous year 2021.

burning prices

Officials in the insurance sector stated that the decline in technical profits came as a result of pricing policies that are detrimental to the market, including what they consider to be price-burning operations that would weaken the positions of many companies.

They stressed that the profitability of insurance companies should depend mainly on the insurance business and not on the investment aspect.

The Secretary General of the Emirates Insurance Association, Farid Lutfi, has indicated that the profitability of insurance companies in the local market is still acceptable despite the decline during the first quarter of this year. The work of insurance companies is insurance and risk bearing , and therefore their main profit should come from insurance operations.

Lotfi attributed the decline in technical profits by a large percentage during the first quarter to many things, of which the main price-burning operations were practiced by some, especially in the automotive and health sectors.

Concerning the concentration of half the market’s profitability in the hands of a few companies, he indicated that this issue has always been clear in the local market, related to the ability of these companies and their control over most of the premiums.

unhealthy indicator

In turn, the CEO of Orient Insurance, Omar Al-Amin, stated that the decline in the technical profits of the insurance sector by this percentage during the first quarter of this year is an unhealthy indicator of the total sector, which is the basis of its job insurance and not investment.

He pointed out that price-burning operations and the collection of premiums at any price are causing these declines in the market.

Regarding Orient’s achievement of about half the profit of the technical market, Al-Amin indicated that this issue is related to the company’s efforts to prevent the price – burning game from entering, and explained that the reduction in prices and Attracting premiums for the purpose of investing can work in some periods, but it involves huge risks, and this is what needs to be done Companies generally shy away from it.

He stressed that companies should seek profit from insurance business before seeking profit from investment premiums.

investment sensitivity

Al-Amin said: “Orient’s share in total technical profits of insurance companies rose to 49% during the first quarter, compared to 27% during the first quarter of 2021, while its share of investment profits fell to 26% compared to by 31% during the same comparison period. “

He explained that Orient is interested in the investment aspect, but adheres to a prudent investment policy that is not at the expense of premiums.

profitable companies

According to the “Vision” monitoring, Orient achieved 1.757 billion dirhams and total profit of 200 million dirhams during the first quarter, with 101 million dirhams investment gains and 99 technical gains, while Abu Dhabi National Insurance achieved 2.282 billion dirhams in installments has, and profits of about 85 million dirhams, including 61 million technical gains, and 24 million investment gains.

Oman Insurance Premiums amounted to 1.1 billion dirhams and profits 67 million dirhams, including 33 million technical gains and 34 million investment gains.

Al Wathba profits totaled 37 million, including 32 million investment gains and 5 million insurance operating gains. The profits of National General Insurance amounted to 29 million dirhams, including 23 million investment gains and 6 million technical gains. Dubai Insurance also made profits of 29 million, including 21 million for the technical part.

Al Dhafra’s profits amounted to 21 million, including 6 million as technical profits, and Al Buhaira’s profits amounted to 20 million, of which 16 million were technical profits. Al-Ain Al-Ahliyyah made about 16 million in total profit, including one million of his artworks.

Salama achieved about 15 million dirhams in total profit, of which about one million dirhams from the technical aspect alone, and the profit of the Union Insurance amounted to about 14 million, including 4 million from investment.

Abu Dhabi National Takaful profit amounted to 12 million, of which about 8 million was from investment, and Orient UNB Takaful reached 5 million, including 2 million as investment profits.

technical losses

Twelve companies suffered technical losses as the technical losses of Sharjah Insurance amounted to 1 million dirhams, but the company made a profit of 26 million dirhams due to an investment gain of about 27 million.

Technical losses to Alliance Insurance and Takaful House amounted to two million dirhams for each company, while the two companies were able to achieve profits of 9 million and 6 million thanks to the investment.

The technical loss of Fujairah amounted to about one million dirhams, but the company made a profit of up to 4 million dirhams.

Fidelity United suffered technical losses of 7 million dirhams and about 8 million dirhams in total profits thanks to the investment.

Hayat’s artistic losses amounted to 1 million dirhams, while the final gains amounted to about one million dirhams thanks to the realization of two million dirhams’ investment profit.

Takaful Emirates and Aman suffered technical losses of about 4 million dirhams and 3 million dirhams, respectively, while Wataniya suffered technical losses of about 3 million and made investment gains of about 3 million.

Scandinavian Insurance, Ras Al Khaimah Insurance and Al Saqr Insurance also suffered technical losses of 5, 8 and 32 million dirhams respectively.

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