Several UAE-listed insurers are struggling with solvency challenges, raising concerns across the financial sector. These issues have sparked talk of potential regulatory help to restore stability. The key phrase “UAE insurance solvency” highlights the growing concern, especially as experts point out weak capital buffers.
Currently, the UAE has 21 insurance firms listed on its stock markets. Ten operate on the Dubai Financial Market (DFM), while eleven are active on the Abu Dhabi Securities Exchange (ADX). Many of these insurers, particularly those offering takaful services, face losses that threaten UAE insurance solvency.
An expert noted that smaller takaful companies compete with stronger conventional insurers. This competition leads to aggressive pricing and lower profits. As a result, capital levels are falling, putting these firms in a risky position and further affecting UAE insurance solvency.
Out of ten takaful providers licensed by the UAE Central Bank, seven are publicly listed. Four of these are reporting losses of 25% or more. Two insurers have reported capital losses exceeding 50%, making recovery even harder and casting more doubt on UAE insurance solvency.
In another case, a listed insurer saw its CEO resign after its auditors flagged a deficit of over AED 5 million in its solvency capital. Such events have added to concerns over the financial soundness of UAE-based insurers and the wider stability of the market.
One company, AMAN, recently faced audit issues. Its auditors declined to issue a full audit opinion. AMAN had planned to transfer its insurance business and become an investment company instead. However, doubts remain about its ability to continue operating, reflecting broader challenges in UAE insurance solvency.
Earlier, AMAN had attempted a transaction with two other Dubai-listed insurers. These deals, which aimed at merging portfolios, failed to reach completion. One main reason was the mismatch between market value and actual business strength—another factor weakening the financial stability of UAE insurance companies.
In many cases, merger talks collapse because top executives fear losing control. This reluctance slows down needed changes and weakens UAE insurance solvency further.
Meanwhile, Saudi Arabia offers a sharp contrast. Its regulators enforce tougher rules and encourage mergers by raising minimum capital requirements. These steps have led to stronger and more stable insurers, offering potential lessons for improving the financial health of UAE-based insurance firms.
However, even with losses, most UAE firms can still offer new policies if they meet capital rules. Yet, firms with weak reserves or poor reinsurance options face limits. They miss out on large, profitable projects and are forced to compete in crowded fields like motor and medical insurance, adding pressure to UAE insurance solvency.
UAE insurance solvency remains a pressing concern. Stronger oversight, support for mergers, and better financial management are now crucial for sector growth.
