Axa Green Crescent Insurance Company plans to focus on life insurance segment and to be selective in the health sector to increase profitability after posting an annual loss last year, the company’s chief executive said on Tuesday.
The insurance company, in which Axa Gulf has a 21 per cent stake and the Kanoo Group a 29 per cent stake, is focusing on life insurance because it remains an under-penetrated market segment in the UAE.
“Life insurance is still developing in this part of the world but we still believe there is a strong potential, especially in the UAE market and this is why we are launching quite an ambitious plan to develop solutions and products that would cover the needs of protection and savings for the UAE population,” said Hassen Bennour. The company wants to capture between 7 and 10 per cent of the market share in the life segment over the next 10 years, he said.
Fierce competition in the heavily penetrated UAE insurance sector has led to premiums being slashed across many lines of cover, leaving some companies exposed. The aggregate results of listed insurers in the UAE shows that the industry swung to a loss last year after posting a profit in 2014.
The 29 listed insurers, from a total of more than 60 in the country, made an aggregate loss of Dh106 million versus a profit of Dh859m a year earlier, said the ratings agency AM Best.
It blamed the dismal results on price competition that led to a deterioration of underwriting performance, a weak investment environment and reserve requirements by the UAE’s insurance regulator.
Axa Green Crescent posted a net loss of Dh16.8m last year compared with a net profit of Dh40,000 in 2014 as gross premiums fell by 38 per cent to Dh47.4m.
Axa Green Crescent has become more selective in its health segment, weeding out unprofitable accounts.
“Being only exposed to health insurance, which is a very competitive market, is something that has proven not to be successful for companies,” said Mr Bennour.
“That’s why in 2015 we have significantly pruned … which means we have been very selective in writing new business on health.” The company also converted a Dh100m bond into equity, raising its capital to Dh200m.
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