Al Sagr National Insurance Company swung to a loss last year due to lower investment income, the Dubai-based insurer said.
Al Sagr posted a net loss of Dh105 million versus a net profit of Dh38.8m in 2014, as the industry struggles to overcome competitive pressures.
The net investments loss reached Dh121.3m compared to a net profit of Dh28.3m a year earlier. Gross premiums fell 1.3 per cent to Dh384.7m.
Net underwriting profit rose 28.4 per cent to Dh65.6m from Dh51.1m a year earlier.
Many insurers in the UAE have suffered investment losses because of their concentration of assets in the volatile equity and real estate markets, which have taken a beating.
The Insurance Authority issued new regulations in February last year that place restrictions on how companies can invest their money and how much exposure they can have to any particular asset class.
The rules also require companies to have an independent investment committee and include measures aimed at strengthening corporate governance, compliance and risk management.
In addition to investment losses, 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.
Twenty-nine listed insurers, from a total of more than 60 in the country, made an aggregate loss of Dh106m last year 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.
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