Lux Actuaries and Consultants and Insurance Monitor bring you the latest GCC Performance Periodical covering the insurance industry performance for the third quarter of 2022. This report examines the key metrics for listed insurers in the GCC region and features financial performance along with data tables, stock performance, capital management metrics, an update on mergers and acquisitions and financial strength ratings.

GCC Listed Insurers: Top line soars by 21.7% in the first nine months of the year

While the overall improving economy, growing resident population and new mandatory covers has undoubtedly benefitted the GCC insurance industry as evident from the soaring increase of 21.7% in the combined Gross Written Premium (‘GWP’) of 80 listed insurers reaching USD 23.9bn in the first nine months of the year, growth has been highly concentrated with 73% generated by (8) leading players across the region.

The report finds that such growth that has come about as a result of (cross-border) acquisitions, strategic arrangements, inward business and other inorganic growth strategies is driving the next wave of growth for capital-rich insurers in the region.

Profitability down

Profitability, however, has dipped by 28.6% during the period due to an increase in the spend on claims, distribution, and administrative expenses as well as lower investment income underpinned by higher domestic inflation, increased mobility, aggressive competition, and volatile capital markets.

At least 40 insurers have reported underwriting losses with the Net Combined Ratio for the period reaching 98.8%. This has necessitated some form of restructuring for several insurers that have been in sustained breach of solvency regulations. In the UAE, corrective measures undertaken in Q3 2022 include the provision of bank guarantees in favour of the regulator, the announcement of mergers and a more radical plan in the case of AMAN that has decided to sell its insurance portfolio and transform into an investment firm to preserve shareholder value.

Rating downgrades

In Saudi Arabia, underwriting losses continue to erode previously restored capital for several insurers including MEDGULF that has triggered a rating downgrade in September, following a previous upgrade in January 2022.

Other significant rating developments in Q3 2022 includes the downgrade of Qatar’s leading insurer - QATI following an overall loss in Q3 2022 and underwriting losses reported in each of the last five years.

Download your free copy of Q3 2022: GCC Performance Periodical here.