By: Mahmoud Gamal
Dubai – Mubasher: Insurance companies listed on the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) saw over a 50% increase in net profits in the first nine months of 2017, pushed up by government decisions after years of accumulated losses.
The financial results of 29 companies registered AED 1.2 billion ($326.6 million) in net profits between January and September 2017, compared to AED 796 million ($216.65 million) in the year-ago period.
Government decisions played an essential role in these results, analysts told Mubasher.
Surging premiums
The insurance sector’s revenues, especially premiums, surged on the back of several decisions, on top of which was mandating individuals in Dubai to subscribe in the health insurance system along with the unification of the car insurance policy, said Fadi El-Ghattis, MindCraft Consultants’ CEO.
Written premiums increased by 15% to AED 16.6 billion from January to September 2017 versus AED 14.14 billion in the comparative period of 2016, data compiled by Mubasher showed.
Orient Insurance acquired the largest portion of the written premiums, followed by Abu Dhabi National Insurance Company (ADNIC).
The insurance sector commenced its recovery with the beginning of 2017, El-Ghattis continued, adding that mergers in the sector, especially between small companies, became “a must” in order to create stronger entities.
More revenues
Menacorp financial analyst Issam Kassabieh expects that the rate of the insurance sector's revenues would quicken ahead of the upcoming value-added tax (VAT) which will be imposed starting 1 January 2018.
Insurance policy prices will be raised in line with the expected increase in car prices, which is set to take place after implementing the VAT, Kassabieh explained.
The forecast growth of insurance companies’ revenues is supported by the recent decree in Saudi Arabia, allowing women to drive, as Saudis account for a large portion of these companies’ customers, Kassabieh concluded.
Translated by: Muhammad Khalid
