This punishment sent out a message to all teams of the importance of maintaining a healthy pace throughout a match
Gross premiums of publicly listed insurers increased by 17 per cent in the first half of 2017 as a compulsory medical insurance programme and rate increases in motor insurance were adopted. S&P Global Ratings expects this growth to moderate in the second half of 2017.
The total net profit for all listed insurers in the UAE increased by 27 per cent to about Dh766 million in the first half of 2017 from about DhD604 million for the same period in 2016.
Analysts at S&P said the revenue growth could be largely attributed to two key regulatory initiatives. "First, we believe this is due to rate increases in motor insurance in response to a new unified motor policy that the UAE Insurance Authority introduced in January 2017, and second, the final stage of implementation of compulsory medical insurance in Dubai, which has increased the number of policyholders under this scheme," they said.
The unified motor policy provides enhanced benefits such as increased insurance cover for third-party liability claims of up to Dh2 million compared to Dh250,000 previously. This new motor cover sets minimum rates that insurers can charge their customers for each vehicle class to limit price wars in the market. To comply with the new minimum rates, a number of insurance companies had to increase prices, S&P analysts said in a report.
"We estimate that this has led to an increase in premium volume from this line of business of more than 15 per cent. Given that the revenue income from motor insurance contributes to about 25 to 30 per cent of premium income in the UAE market, this change has been a key reason for the increase in premium volume," they said.
The second key reason for the significant boost to gross premiums written (GPW) is new business from compulsory medical insurance in Dubai. This scheme entered its third and final implementation stage in 2016, when about 1.5 million uninsured, of the emirates' roughly 3.8 million residents, had to obtain medical insurance coverage, initially by year-end 2016, which was then extended to March 31, 2017.
The sector's overall net income improved significantly year on year as on June 30, 2017, thanks to better performance in particular of the takaful sector.
Gross premium growth and net profits for the full-year 2017 are likely to be slightly better than in 2016, S&P analysts said.
Apart from some individual exceptions, S&P expects overall credit conditions in the UAE insurance sector to remain stable over the next 12 months.
The report said a significant increase in underwriting profitably particularly in the takaful sector had a positive impact on the market's total net profits. While the 21 listed conventional insurance companies achieved a total net underwriting profit of Dh355 million as of June 30, 2017, (compared with Dh277 million as of the same date in 2016), the eight listed takaful players generated a total net underwriting profit of Dh32 million.
The conventional insurance sector also recorded an improvement in total net underwriting profit in the first half of 2017 to Dh355 million from Dh272 million for the same period in 2016. However, insurers' investment income declined to about Dh446 million in 2017 from about Dh544 million in 2016.
"The decline in investment income was due to ongoing downward pressure on real estate prices, resulting from an increasing demand and supply mismatch. At the same time, equity markets in the UAE continue to show weak performance as economic growth remains relatively low due to lower oil prices," S&P analysts said.
- issacjohn@khaleejtimes.com
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