Insurance House losses mount over first nine months

Losses at Insurance House widened for the first nine months of the year amid tightening competition.

The Abu Dhabi-based insurer reported a net loss of Dh10.5 million for the nine months ended September 30 compared with a net loss of Dh7.1m in the same period last year. It did not give a profit or loss figure for the third quarter.

“Despite the unprecedented intense competition among insurance companies, the company’s business portfolio grew significantly in terms of volume and performance, due to the necessary corrective measures that we have initiated,” said Mohammed Abdulla Alqubaisi, the company’s chairman. “We remain optimistic of our profitable growth potential in the near future.”

As a result of its measures, the company said its s so-called gross premiums written increased 23 per cent in the first nine months of 2015 to Dh94.2m, compared to Dh76.9m in the same period the previous year.

Many insurers have joined the industry in recent years, making it difficult for some to stay afloat, especially those that made risky investments in the stock market. And banks are increasingly getting into insurance to bolster profits at a time when the margins they are getting from loans is decreasing amid low interest rates.

Still, despite the competition analysts say there is still room for growth.

A PricewaterhouseCoopers report last year said that the insurance market in the Middle East had significant growth potential, with an average insurance take-up of just 0.3 per cent in life insurance and 1.1 per cent in non-life insurance in 2012.

The report said life insurance was particularly underdeveloped in the UAE and Saudi Arabia, and predicted that the insurance sector would experience a wave of mergers and acquisitions.

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