The UAE insurance sector maintained its recovery trajectory in the first half of 2025, building on the strong 1Q2025 performance and further distancing itself from the stress impact of April 2024 rains, points out Badri Management Consultancy, an international actuarial and risk consultancy firm.
Profitability
In a report titled “UAE – Listed Insurance Industry Performance Analysis – H1 2025”, Badri said that profitability strengthened markedly, with industry profit before tax climbing by 63% to AED2.2bn (1H2024: AED1.3bn).
The top five profit generators contributed AED1.6bn, up by 32%, while the remaining insurers collectively grew their profits by 420%, from AED107m to AED557m.
Importantly, the proportion of profits linked to insurance activities remained high, with ~80% of industry earnings derived from insurance service results (ISRs), highlighting a shift towards core underwriting profitability rather than reliance on investments.
Nevertheless, investment income continues to play a key role for several players. Among the top 10 profit generators, the majority were supported more by investment performance than insurance results. Conversely, a handful of insurers recorded investment losses, underscoring the uneven reliance on financial income across the sector.
Underwriting margins improved across the market, with the weighted average underwriting profit margin doubling to 4% (1H2024: 2%). Some insurers maintained industry-leading margins of above 25%, while others, though still negative, improved significantly compared to last year. These shifts signal early progress in underwriting discipline but highlight the challenges facing weaker players.
Insurance revenue
Insurance revenue for the 27 listed companies analysed increased by 19% to AED24.6bn in the first six months of this year from AED20.7bn in 1H2024.
The report said, “This expansion reflects sustained premium rate increases, improved risk-based pricing, and continued demand in Motor and Medical lines, which remain the primary growth drivers.”
The top five insurance companies accounted for AED16.9bn of total revenue, marking 19% growth from AED14.2bn last year, while the remaining companies collectively grew 17% to AED7.7bn. Concentration in market leadership continues to deepen, reinforcing the importance of scale and operational efficiency.
Insurance service results
ISR improved significantly, rising by 68% to AED1.6bn (1H2024: AED972m). The leading five insurers contributed AED1.3bn, up by 31% year on year. Encouragingly, the remaining companies reported a sharp turnaround, moving from AED14m in 1H2024 to AED372m in 1H2025, reflecting improved underwriting discipline across mid-sized players. Despite overall improvements, eight out of 27 insurers still reported negative ISRs.
Solvency
The Central Bank of the UAE continues to apply regulatory pressure on insurers not meeting solvency requirements, prompting capital increases and market exits, including at least one foreign branch entering runoff. These developments reflect a market gradually consolidating and raising entry barriers for undercapitalised operators.
Looking ahead
Gradual premium rate improvements, coupled with enhanced regulatory oversight, are expected to sustain underwriting margins and discourage underpriced policies. However, insurers must remain cautious of potential reinsurance cost escalations and deferred impacts of treaty renewals, particularly in light of 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 preserve underwriting discipline, strengthen claims management, and reduce dependency on volatile investment income.
Overall, the first half of 2025 confirms that the UAE insurance sector is firmly on a recovery path, with rising profitability, stronger underwriting results, and continued market concentration around the top players. A full-year outcome will largely hinge on maintaining premium discipline and navigating evolving reinsurance dynamics.