The UAE insurance industry continued its upward trend in the first half of 2025, building on its strong performance from the first quarter and steadily moving away from the challenges posed by the April 2024 rains.
This ongoing recovery was supported by higher premium rates and robust investment earnings.
According to Badri Management Consultancy, the insurance revenue for the 27 listed companies rose by 19% to Dh24.6 billion from January to June 2025, compared to Dh20.7 billion in the same period last year.
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“This growth is attributed to consistent premium rate hikes, improved risk-based pricing, and a persistent demand in motor and medical insurance segments, which continue to be the main growth drivers,” the Consultancy reported in its first-half analysis.
In April last year, the UAE experienced the heaviest rainfall in 75 years, resulting in significant damage to vehicles and properties in Dubai, Sharjah, and the northern emirates, leading insurers to face claims worth billions of dirhams.
Data from Badri Management showed that the top five companies reported Dh16.9 billion in total revenue, marking a 19% increase from Dh14.2 billion last year, while the rest collectively grew by 17% to Dh7.7 billion.
Profits
UAE insurers experienced robust profit growth in the January-June 2025 period, with profits increasing 63% to Dh2.2 billion from Dh1.3 billion in the same period last year.
The top five profit contributors generated Dh1.6 billion, up 32%, while the remaining insurers collectively expanded their profits by 420%, from Dh107 million to Dh557 million. Notably, 80% of industry profits were derived from industrial special risks (ISRs), indicating a shift towards core underwriting profitability rather than relying on investment returns.
Nonetheless, Badri noted that investment income remained crucial for several companies. Among the top 10 profit generators, most were more reliant on investment performance than insurance outcomes.
“Some insurers maintained industry-leading margins above 25%, while others, although still negative, showed significant improvement compared to last year. These changes indicate early progress in underwriting discipline but underscore the challenges faced by weaker companies,” it noted.
A word of caution
Looking forward, Badri Management anticipates that gradual premium rate enhancements, along with strengthened regulatory oversight, will sustain underwriting margins and deter underpriced policies.
However, it cautioned that insurers need to be wary of potential increases in reinsurance costs and the delayed effects of treaty renewals, particularly considering the 2024 weather-related losses. “With profitability increasingly tied to core insurance operations, the industry’s long-term sustainability will depend on insurers’ ability to uphold underwriting discipline, enhance claims management, and reduce reliance on volatile investment income,” it added.
Overall, the first half of 2025 confirms that the UAE insurance sector is steadily recovering, with rising profitability, improved underwriting results, and continued market concentration among leading players. “The full-year results will largely depend on maintaining premium discipline and navigating the evolving reinsurance landscape,” Badri analysis concluded.
