Insurance Climate Globally
The MultaQa Insurance Rendezvous, quoting Swiss Re reports, summarized the global general insurance market as follows:
- Global general insurance penetration is dropping.
- Profitability is challenged both due to thin rates and also the sluggish investment market.
- Average return on equity of 7% in 2013.
Within this global environment, the annual general meeting of United Insurance Company PSC, signaled that the company is embracing this challenge with resilience and optimism.
United Insurance Company PSC Performance & Outlook
The primary aim of this piece is to thank all those who contributed and continue to contribute to an enriching experience for our customers, staff, reinsurers and stakeholders at United Insurance Company PSC. A technical snapshot of the company at the end of 2013 reveals the following:
a) Current assets of the company grew by 37%. Within these, insurance and reinsurance assets grew by 17% signifying increased insurance and reinsurance activity;
b) Shareholders’ equity also grew by 19%;
c) The increased level of insurance activity in 2013 saw an increase in unearned premium reserves at the end of the year of 35%. These will be released as earned premiums in 2014. In addition to this gross insurance revenue still increased by 30% in 2013 and continues to increase in 2014 on a year to date basis at more than 50%;
d) Despite the reinstatement of certain claims and IBNR reserves, the impact of gross and net claims on the 2013 P&L was less than proportionate;
e) The net result from last year’s activity was a net profit of AED 8.4m compared to a loss of AED 22m in 2012 resulting in earnings per share improving from a negative 0.22 to a positive 0.08; i.e. a higher than aggregate return to equity when compared to international markets.
The above are facts that meet the eye when one goes through the audited financials. However, behind these, there are other very positive factors that underline this progress. Around 1,000 participant-hours of training to staff and brokers was delivered in 2013. Qualified staff throughout the echelons of the company increased. Around 10% of staff now hold CII qualifications and around 20% are pursuing CII accredited training.
At a time when secondary quality reinsurance capacity is increasing in the region, United’s treaties are lead by the topmost layer of the top tier global reinsurers, i.e. Swiss Re, Munich Re and Allianz. Following is equally strong by internationally accepted investment grade reinsurance securities. At United we have also started the interactive process to be rated by S&P and will be announcing our credit rating before the end of Q2-2014.
The objective in 2014 is not to do different things; but to do things differently. Our appetite remains in line with our profile, i.e. one of the oldest, albeit small, UAE insurance companies focusing on the needs of personal, SME and smaller corporate clients, slowly growing into the larger corporate and industrial sector. We employ just over 100 dedicated employees, operating from around 10 premises (with licenses for all emirates), serving 50 brokers and having paid over AED 100 in claims in 2013 with our focus singularly on the client.