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UAE insurance market bucks downturn

DUBAI — The UAE insurance market, dominated by companies based in Abu Dhabi and Dubai, delivered strong technical performance through the economic downturn, according to Standard & Poor’s Ratings Services.

The rating agency in its report on Monday examined how the insurance market in the UAE is performing and said the UAE insurance market largely reflects the federal structure of the country.

“Dubai-based companies have grown rapidly in recent years and achieved the strongest technical profitability in 2009, but we expect this to slow as a result of slower economic growth. By contrast, Abu Dhabi’s government plans to continue investing heavily in infrastructure, and shareholder funds are shifting to reflect this,” S&P’s credit analyst Kevin Willis said in a statement.

Willis said, “While the geographical distribution of premiums and assets has changed little over the past year, premium growth has shifted to the personal/retail sectors (that is, health, life, and property) from the commercial sectors (marine and construction/engineering). This reflects the growing penetration of insurance into UAE society, and the slowdown in the shipping and construction industries.”

Companies based in Dubai collected 47 per cent of the total premium in 2009, Abu Dhabi 38 per cent and other emirates 15 per cent, the rating agency said in a separate report this month. Gross premiums of the UAE insurance companies recorded a 5 per cent rise to Dh9.9 billion in 2009 compared to Dh9.4 billion in 2008.

· abdulbasit@khaleejtimes.com