Dubai-Mubasher: UAE-listed insurance firms are showing earnings strain so far this year despite good premium growth, according to a report by Standard & Poor's (S&P) on Tuesday.
Gross premiums grew 9% year-on-year to AED13.5 billion (or $3.7 billion) in the first nine months of 2015, in line with S&P’s expectations set earlier this year.
The rise is mainly attributed to the growing maturity and expansion of the Dubai compulsory health scheme, launched in the last quarter of 2014 but others were the favourable economic and political climate.
However, underwriting and net earnings show real weakness so far this year, said credit analyst Kevin Willis at S&P.
Willis said there are three key factors behind the disappointing results, which are intense competition in all lines of business, technical reserving corrections, and weak investment returns.
S&P doesn’t expect to see any meaningful recovery in the UAE insurance market's earnings, either technical or net, before 2017.
