RIYADH: UAE-listed insurance companies are projected to have seen a 15 to 20 percent surge in policy premiums in 2023 compared to the previous year. In an interview with the Emirates News Agency, Emir Mujkic, the director and lead analyst for Insurance Ratings at S&P Global, noted that listed insurance companies witnessed a 19 percent increase in net profits year-on-year ing the first nine months of 2023. He expected this positive trend to have continued to the end of the year, primarily due to improved investment returns fueled by favorable economic conditions and recent structural advancements within the sector. Mujkic estimated that the car insurance industry alone will have seen a 5 to 10 percent growth rate. Looking forward, he forecast the momentum for the whole sector to extend into 2024, driven by increasing vehicle premiums and higher interest rates, which will further enhance investment returns. While acknowledging the evolving nature of life insurance in the UAE, Mujkic emphasized that S&P Global’s assessment of the property, casualty coverage, and health protection sectors aligns with global benchmarks for these policies. He highlighted the growth prospects of the UAE’s property casualty and health insurance sectors, propelled by recent healthcare policy acquisitions. Factors such as low-risk products, high market entry barriers, and supportive regulatory frameworks contribute to the strong outlook, positioning the UAE market as one of the most profitable in the Gulf Cooperation Council for property and casualty insurance and health insurance, primarily driven by the performance of the top five listed companies. S&P Global’s observations revealed a trend of increasing business concentration in the UAE insurance industry, suggesting a potential shift toward market consolidation as the top five players exhibit robust net profit growth compared to other market participants. Addressing global regulatory alignment, Mujkic commended the UAE’s governance and transparency practices, with traditional and Islamic insurance companies adhering to International Financial Reporting Standards for financial reporting. Notably, all local insurers successfully implemented the new IFRS 17 accounting standards in 2023. IFRS 17 requires a company to measure insurance contracts using updated estimates and assumptions that reflect the timing of cash flows and any uncertainty relating to insurance contracts. Mujkic also noted the significant consolidation within the takaful segment, citing mergers that have nearly halved the number of listed takaful companies over the past two years. He attributed this trend to a combination of merger and acquisition activities and the need for smaller companies to mitigate costs through expansion. Intense competition and cost pressures are expected to drive further integration among small and medium-sized insurance companies, according to Mujkic.