Taha | Actuaries & Consultants |

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Financial Analysis of Reported Earnings
As of 30 June 2013
UAE National Insurance & Takaful Companies







22 September 2013



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EXECUTIVE SUMMARY
Financial Statements of twenty nine (29) listed, locally incorporated, National companies
are the basis for this quarter-end report.
As of 30 June 2013, these companies possess AED 35.1 billion of Assets against
Liabilities of AED 20.6 billion. As compared to year-end 2012, both Assets and
Liabilities have increased by approximately 8%. Share Capital of the companies
remained almost flat at AED 6.4 billion; only Al Khazna Insurance Company P.S.C.
(AKIC) increased their Share Capital by AED 10 million. Equity, on a consolidated basis,
increased from AED 13.7 billion to AED 14.6 billion during the first half of 2013, showing
an increase of 6%.
Two (2) Conventional and five (5) Takaful companies are at higher risk as their Equity is
below their Share Capital level. Equity as percentage of Assets is higher for
Conventional companies than for their Takaful counterparts.
On the total industry level, Equity as % of Assets remained level at 42%, when
compared from 31 December 2012 to 30 June 2013. The industry's Half-Yearly Returns
on Assets, Share Capital and Equity are 2%, 12% and 6%, respectively. The positive
returns are due to the positive Net Profits of the Conventional companies and the few
positive Net Profits from the Takaful companies. Comparing the two groups, the Net
Profit figure from Takaful companies is only AED 6 million as compared to the Net Profit
figure of Conventional companies which stands at AED 785 million for Q1&2 2013.
Return on Assets, Share Capital and Equity for Takaful companies are all 0%.
As compared to 31 March 2013, the Net profit figure as of 30 June 2013 has improved
for both Conventional and Takaful companies. Only one (1) Conventional company and
four (4) Takaful companies reported negative Net Profit for 2013 as of 30 June.
Total Gross Premium for the period under review is AED 7.6 Billion which is 3% higher
than the same period in 2012. However, totals and averages hide the variation between
companies and sectors: Gross Premium for Conventional companies increased from
AED 5.7 billion, as of 30 June 2012, to AED 6.3 billion, as of 30 June 2013, a 10%
increase. Gross premium for Takaful companies decreased from AED 1.7 billion in 2012
to AED 1.3 billion in 2013, a 20% drop.
In total, Takaful companies are relying less on reinsurance than Conventional
companies which usually means either that Takaful companies have more technical
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ability to assess their risk, and thus their comfort in retaining more of it; or, that the
reinsurance market is tight for Takaful companies. There are varying levels of
reinsurance ratios for Takaful companies, and thus it might be a mixture of both.
When examining the total market that those companies comprise, it appears that in total
Reinsurance is not being used effectively to hedge their risk. This is demonstrated by
Reinsurance Loss Ratios compared to Net Loss Ratios:




While Net Loss Ratio for all companies is 65% for Q1&2 2013, Reinsurance Loss Ratio
is only 50% for those same companies in total. Of course there are variations between
the companies, and for some companies the picture is more complicated when you
consider other factors, such as Commission. However, we believe that with actuarial
modeling, most of the companies could improve their bottom line by better utilization of
Reinsurance.
Industry, on the whole, incurred 14% more General and Administrative Expenses when
comparing 30 June 2012 with 30 June 2013. Conventional companies spent AED 617
million in the first six months of 2013, 19% more than the same six months in 2012,
while Takaful companies spent 185 million in 2013, exactly the same figure as they
reported in 2012. Takaful companies reported higher, though still a negative, Net
Commission figure for 30 June 2013, while Conventional companies showed lower Net
Commission figure when compared with 30 June 2012.
All the above are market trends and totals on a consolidated basis. However, totals can
hide a lot of the interesting details and variations between companies. For a better
understanding of the ups and downs of each company, please see our more detailed
analysis below.
INTRODUCTION
Insurance and Takaful companies operating in the UAE are legally structured as either
National companies or as branches of foreign companies. In this analysis, we will focus
on financial statements of twenty nine (29) listed, locally incorporated, National
companies, out of which seven (7) are Takaful companies. Our analysis uses the data
from financial statements, as of 30 June 2013. The statements were downloaded from
one of the following websites:
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Dubai Financial Market (www.dfm.ae)
Abu Dhabi Securities Exchange (www.adx.ae)
Unfortunately, the data for branches of foreign companies or the non-listed, locally
incorporated, National companies is not available publically. Hence, these companies
are not included in this analysis.
Our analysis will start with reporting and analyzing key figures of a Balance Sheet like
Assets, Liabilities, Share Capital and Equity. We will also calculate the ratio of Net profit
to these key Balance Sheet numbers. Next, we will scrutinize the important numbers
from the Income Statement and present both Underwriting results and Net Profit for the
period, as reported by each company. We will present a Reinsurance Analysis which
compares Reinsurance Premium to Gross Premium. We will compare Gross, Net and
Reinsurance Loss Ratios for all the companies as of 30 June 2012 and 2013. Finally,
we will report on General and Administrative Expenses and Net Commission for both
the quarters under study.
For these analyses, we have presented consolidated figures for all Conventional
companies and Takaful companies separately. Further, we also have provided the
figures for Q1 2013, wherever possible, to allow comparisons between the first two (2)
quarters of 2013. These total figures will act as a benchmark for any company to
compare their performance with that of the industry.
BALANCE SHEET HIGHLIGHTS
Table 1a provides figures of Assets and Liabilities for Conventional companies whose
Financial Statements are listed on one of the above-mentioned websites. The figures
provided include company-wide values as of 30 June 2013 and 31 December 2012.
As of 30 June 2013, Assets of Conventional companies have increased by 9% while
Liabilities have increased by 11% when compared with the figures as of 31 December
2012. The highest increase in Assets is reported by Dubai Insurance Company (PSC)
(DIC), with an increase of 23%. The main reasons behind the increase in Assets is
increases in their 'Financial Instruments' and 'Reinsurance Assets'. The highest
increase in Liabilities is reported by Green Crescent Insurance Company (GCIC), with
an increase of 32% in the first six months of 2013. The main reason behind the increase
in Liabilities is increases in their 'Insurance Contract Liabilities' and 'Account Payables
and Accruals'. Two conventional companies reported decreases of both their Assets
and Liabilities.
Table 1b provides figures of Assets and Liabilities for Takaful companies as of 30 June
2013 and 31 December 2012.
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As of 30 June 2013, both Assets and Liabilities of Takaful companies have increased by
1%, when compared with the figure as of 31 December 2012. Methaq Takaful Insurance
Company PSC (METHAQ) showed the highest increase in Assets, with an increase of
25%. National Takaful Company (Watania) PJSC (Watania) reported the highest
increase in Liabilities, with an immense 135% increase.
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Jun-13 Dec-12 % Change Jun-13 Dec-12 % Change
3-Jan-00 4-Jan-00 5-Jan-00 6-Jan-00
Abu Dhabi National Insurance Company PSC 4,484 4,129 9% 2,388 2,040 17%
Al Ain Ahlia Insurance Company - Public Shareholding Company 1,670 1,552 8% 620 566 9%
Al Buhaira National Insurance Company P.S.C. 1,951 1,835 6% 1,331 1,226 9%
Al Dhafra Insurance Company P.S.C. 768 710 8% 413 398 4%
Al Fujairah National Insurance Company P.S.C. 410 376 9% 260 242 8%
Al Khazna Insurance Company P.S.C. 1,015 1,049 -3% 391 421 -7%
Al-Sagr National Insurance Company (Public Shareholding Company) 1,286 1,164 10% 692 573 21%
Al Wathba National Insurance Company PJSC 1,100 917 20% 564 468 20%
Alliance Insurance PSC 1,142 1,067 7% 769 711 8%
Orient Insurance Company PJSC and its subsidiaries 3,187 2,860 11% 1,737 1,636 6%
Arabian Scandinavian Insurance Company P.L.C. 386 376 3% 99 87 14%
Dubai Insurance Company (PSC) 683 555 23% 325 275 18%
Dubai National Insurance and Reinsurance (P.S.C.) 470 396 19% 239 205 16%
Emirates Insurance Company P.S.C 1,725 1,617 7% 842 817 3%
Green Crescent Insurance Company PJSC 239 195 22% 161 122 32%
Insurance House P.S.C 258 303 -15% 125 176 -29%
National General Insurance Co. (P.S.C.) 904 867 4% 526 521 1%
Oman Insurance Company P.S.C. 5,082 4,593 11% 3,485 3,051 14%
Ras Al Khaimah National Insurance Company P.S.C. 491 436 13% 282 244 16%
Sharjah Insurance Company P.S.C. 462 392 18% 218 193 13%
Union Insurance Company P.S.C. 574 492 17% 294 235 25%
United Insurance Company P.S.C. 284 267 6% 150 151 0%
Total Conventional Companies 28,569 26,149 9% 15,910 14,357 11%
Mar-13 Jun-13 % Change Mar-12 Jun-12 % Change
Total Conventional Companies 28,206 28,569 1% 16,099 15,910 -1%
Name of Company
Assets Liabilities
Table 1a
Financial Statement Analysis of UAE National Conventional Companies
Balance Sheet Highlights as of 30 June 2013
Figures in AED million
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Table 2a provides values for Share Capital and Equity for Conventional companies as of 30 June 2013 and 31 December
2012.
Share Capital of AKIC is increased by AED10 million during Q2 2013 as the total value of Share Capital of Conventional
companies stood at AED 4.3 billion. Among all the Conventional companies, Oman Insurance Company P.S.C. (OIC)
holds the highest amount of Share Capital at AED 462 million.
Total Equity for Conventional companies under observation is AED 12.7 billion which provides cushion to the industry in
case the actual payout to fulfill Liabilities exceeds the allotted amount. When compared with 31 December 2012 figure,
total Equity for Conventional companies increased by 7% in the first six months of 2013.
Jun-13 Dec-12 % Change Jun-13 Dec-12 % Change
Abu Dhabi National Takaful Company PSC 485 462 5% 309 297 4%
Dar Al Takaful PJSC 177 150 18% 128 97 32%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 545 504 8% 402 361 11%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 4,660 4,852 -4% 3,396 3,588 -5%
Methaq Takaful Insurance Company PSC 271 187 45% 168 89 88%
National Takaful Company (Watania) PJSC 239 181 32% 114 48 135%
Takaful Emarat - Insurance (PJSC) 199 203 -2% 126 118 7%
Total Takaful Companies 6,575 6,537 1% 4,643 4,599 1%
Mar-13 Jun-13 % Change Mar-13 Jun-13 % Change
Total Takaful Companies 6,559 6,575 0% 4,647 4,643 0%
Table 1b
Financial Statement Analysis of UAE National Takaful Companies
Balance Sheet Highlights as of 30 June 2013
Figures in AED million
Name of Company
Assets Liabilities
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Jun-13 Dec-12 % Change Jun-13 Dec-12 % Change
9-Jan-00 10-Jan-00 7-Jan-00 8-Jan-00
Abu Dhabi National Insurance Company PSC 375 375 0% 2,095 2,090 0%
Al Ain Ahlia Insurance Company - Public Shareholding Company 150 150 0% 1,050 986 7%
Al Buhaira National Insurance Company P.S.C. 250 250 0% 621 609 2%
Al Dhafra Insurance Company P.S.C. 100 100 0% 355 312 14%
Al Fujairah National Insurance Company P.S.C. 100 100 0% 150 134 12%
Al Khazna Insurance Company P.S.C. 420 410 2% 623 628 -1%
Al-Sagr National Insurance Company (Public Shareholding Company) 230 230 0% 593 591 0%
Al Wathba National Insurance Company PJSC 180 180 0% 536 449 19%
Alliance Insurance PSC 100 100 0% 373 356 5%
Orient Insurance Company PJSC and its subsidiaries 405 405 0% 1,451 1,224 18%
Arabian Scandinavian Insurance Company P.L.C. 140 140 0% 287 289 -1%
Dubai Insurance Company (PSC) 100 100 0% 357 280 27%
Dubai National Insurance and Reinsurance (P.S.C.) 116 116 0% 231 191 21%
Emirates Insurance Company P.S.C 135 135 0% 883 800 10%
Green Crescent Insurance Company PJSC 100 100 0% 78 74 5%
Insurance House P.S.C 120 120 0% 133 127 5%
National General Insurance Co. (P.S.C.) 150 150 0% 378 346 9%
Oman Insurance Company P.S.C. 462 462 0% 1,597 1,543 4%
Ras Al Khaimah National Insurance Company P.S.C. 100 100 0% 209 192 9%
Sharjah Insurance Company P.S.C. 138 138 0% 244 199 23%
Union Insurance Company P.S.C. 331 331 0% 280 257 9%
United Insurance Company P.S.C. 100 100 0% 134 117 15%
Total Conventional Companies 4,301 4,291 0% 12,658 11,792 7%
Mar-13 Jun-13 % Change Mar-12 Jun-12 % Change
Total Conventional Companies 4,291 4,301 0% 12,107 12,658 4%
Name of Company
Table 2a
Financial Statement Analysis of UAE National Conventional Companies
Balance Sheet Highlights as of 30 June 2013
Figures in AED million
Share Capital Equity
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Equity of DIC is increased by 27% during 2013 which is the highest percentage increase in Equity for any Conventional
company. Equity for two (2) Conventional companies has decreased during 2013.
Table 2b above provides values for Share Capital and Equity for Takaful Companies as of 30 June 2013 and 31
December 2012.
Share Capital of Takaful companies also remained unchanged during 2013 at AED 2.1 billion. Islamic Arab Insurance Co.
(Salama) and its subsidiaries (SALAMA) possesses the highest amount of Share Capital, with holdings of AED 1.2 billion.
Total Equity for Takaful companies saw a minor decrease from AED 1.94 billion at the year-end 2012 to AED 1.93 billion
as of 30 June 2013. It may be noted that their total Equity was lower at AED 1.91 billion as of 31 March 2013. Four (4)
Takaful companies reported increases in their Equity while three (3) reported decreases.
Jun-13 Dec-12 % Change Jun-13 Dec-12 % Change
9-Jan-00 10-Jan-00 7-Jan-00 8-Jan-00
Abu Dhabi National Takaful Company PSC 100 100 0% 175 165 6%
Dar Al Takaful PJSC 100 100 0% 49 53 -7%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 226 226 0% 143 142 0%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 1,210 1,210 0% 1,264 1,263 0%
Methaq Takaful Insurance Company PSC 150 150 0% 103 97 5%
National Takaful Company (Watania) PJSC 150 150 0% 125 132 -5%
Takaful Emarat - Insurance (PJSC) 150 150 0% 73 85 -14%
Total Takaful Companies 2,086 2,086 0% 1,933 1,939 0%
Mar-13 Jun-13 % Change Mar-13 Jun-13 % Change
Total Conventional Companies 2,086 2,086 0% 1,912 1,933 -1%
Table 2b
Financial Statement Analysis of UAE National Takaful Companies
Balance Sheet Highlights as of 30 June 2013
Figures in AED million
Name of Company
Share Capital Equity
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Net Profit
Jun-13 Dec-12 Q1&2 2013 Assets
Share
Capital
Equity
Abu Dhabi National Insurance Company PSC 47% 51% 80 2% 21% 4%
Al Ain Ahlia Insurance Company - Public Shareholding Company 63% 64% 43 3% 29% 4%
Al Buhaira National Insurance Company P.S.C. 32% 33% 25 1% 10% 4%
Al Dhafra Insurance Company P.S.C. 46% 44% 43 6% 43% 13%
Al Fujairah National Insurance Company P.S.C. 37% 36% 13 3% 13% 9%
Al Khazna Insurance Company P.S.C. 61% 60% (11) -1% -3% -2%
Al-Sagr National Insurance Company (Public Shareholding Company) 46% 51% 20 2% 8% 3%
Al Wathba National Insurance Company PJSC 49% 49% 42 4% 23% 8%
Alliance Insurance PSC 33% 33% 12 1% 12% 3%
Orient Insurance Company PJSC and its subsidiaries 46% 43% 163 5% 40% 12%
Arabian Scandinavian Insurance Company P.L.C. 74% 77% 16 4% 12% 6%
Dubai Insurance Company (PSC) 52% 51% 26 4% 26% 8%
Dubai National Insurance and Reinsurance (P.S.C.) 49% 48% 17 4% 15% 8%
Emirates Insurance Company P.S.C 51% 49% 59 4% 44% 7%
Green Crescent Insurance Company PJSC 33% 38% 3 1% 3% 3%
Insurance House P.S.C 52% 42% 6 2% 5% 4%
National General Insurance Co. (P.S.C.) 42% 40% 66 7% 44% 18%
Oman Insurance Company P.S.C. 31% 34% 94 2% 20% 6%
Ras Al Khaimah National Insurance Company P.S.C. 43% 44% 27 6% 27% 14%
Sharjah Insurance Company P.S.C. 53% 51% 12 3% 9% 5%
Union Insurance Company P.S.C. 49% 52% 21 4% 6% 8%
United Insurance Company P.S.C. 47% 44% 8 3% 8% 6%
Total Conventional Companies 44% 45% 785 3% 18% 6%
Table 3a
Financial Statement Analysis of UAE National Conventional Companies
Balance Sheet Ratios and Returns
Figures in AED million
Name of Company
Equity as % of Assets Half-yearly Return on
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BALANCE SHEET RATIOS AND RETURNS
Table 3a presents Equity as Percentage of Assets for Conventional companies as of 30 June 2013 and 31 December
2012. The table also shows Half-Yearly Return for Conventional companies on Assets, Share Capital and Equity for Q1&2
2013.
Equity as Percentage of Assets tells us how much in assets a company holds over and above their liabilities. The higher
the ratio, the lower the risk the company possesses. For Conventional companies, this ratio is 44% and 45% as of 30
June 2013 and 31 December 2012, respectively. Some companies showed noticeable deterioration in this ratio; however,
for most of the companies, this ratio is fairly stable at company level, showing minor changes when comparing 30 June
2013 and 31 December 2012 figures.
Arabian Scandinavian Insurance Company P.L.C. (ASIC) has shown the highest Equity as percentage of Assets among
Conventional companies.
Net Profit
Jun-13 Dec-12 Q1&2 2013 Assets
Share
Capital
Equity
Abu Dhabi National Takaful Company PSC 36% 36% 20 4% 20% 12%
Dar Al Takaful PJSC 28% 35% (4) -2% -4% -7%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 26% 28% (9) -2% -4% -6%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 27% 26% 13 0% 1% 1%
Methaq Takaful Insurance Company PSC 38% 52% 5 2% 4% 5%
National Takaful Company (Watania) PJSC 52% 73% (7) -3% -5% -5%
Takaful Emarat - Insurance (PJSC) 37% 42% (12) -6% -8% -15%
Total Takaful Companies 29% 30% 6 0% 0% 0%
Financial Statement Analysis of UAE National Takaful Companies
Balance Sheet Ratios and Returns
Table 3b
Figures in AED million
Name of Company
Equity as % of Assets Half-yealry Return on
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Half-yearly Return on Assets is calculated by dividing the Half-Yearly Net Profit by
average assets during the period of the study. Return on Assets for all Conventional
companies, on a consolidated basis, is 3%. Some Conventional companies have shown
the Half-Yearly Return on Assets equal to or greater than 6%. These include Al Dhafra
Insurance Company P.S.C. (DHAFRA), National General Insurance Co. P.S.C. (NGIC)
and Ras Al Khaimah National Insurance Company P.S.C. (RAKNIC).
Return on Share Capital explains how efficiently a company utilizes its capital. This ratio
is calculated by dividing Net Profit by average Share Capital during the period of the
study. Half-Yearly Return on Capital for Conventional companies is 18%. Return on
Capital for companies like DHAFRA, NGIC and Emirates Insurance Company (EIC) is
above 40%.
Return on Equity is calculated by dividing Net Profit by average equity during the
analysis period. Industry wide, Conventional companies' Half-Yearly Return on Equity is
6%. DHAFRA, Orient Insurance Company (PJSC) and its subsidiaries (ORIENT), NGIC
and RAKNIC have all shown Return on Equity in double-digits.
Table 3b shows Equity as Percentage of Assets for Takaful companies as of 30 June
2013 and 31 December 2012. The table also shows Half-Yearly Return for Takaful
companies on Assets, Share Capital and Equity. For Takaful companies, the ratio of
Equity as Percentage of Assets is only 29% as of 30 June 2013 compared to 44% for
Conventional companies.
For Takaful companies, Half-Yearly Returns on Assets, Share Capital and Equity for the
first half of the year are all 0%, which is an improvement from the first quarter where the
returns were negative, on a consolidated basis. Three Takaful companies have positive
returns: Abu Dhabi National Takaful Company PSC (ADNTC), SALAMA and METHAQ,
while the returns for the rest of the Takaful companies, on an individual basis, are
negative.
INCOME STATEMENT - NET PROFIT
Table 4a presents different Income Statement figures for Conventional companies for
both 30 June 2013 and 30 June 2012.
Conventional companies registered 10% and 7% increase in their Net Premium Earned
and Net Incurred Claims, respectively, from 30 June 2012 to 30 June 2013. Some
companies showed very high change in Net Premium Earned and Net Incurred Claims,
when comparing the figures between 2012 and 2013. Net Premium Earned and Net
Claims incurred in Q2 2013 alone are much lower than those in Q1 2013.
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Actuarially speaking, we like to compare Net Premium Earned and to Net Incurred Claims. While most companies
reported their numbers in this way, some companies showed their numbers without specifying the change in unearned
premiums or change in outstanding claims. As in our last report, we assumed, for the sake of consistency, that all Net
Premiums are Net Earned and all Net Claims are Net Incurred Claims.
Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change
Abu Dhabi National Insurance Company PSC 368 295 25% 266 204 31% 108 104 4% 80 86 -7%
Al Ain Ahlia Insurance Company - Public Shareholding Company 131 105 25% 81 76 8% 52 42 25% 43 36 18%
Al Buhaira National Insurance Company P.S.C. 124 152 -18% 125 140 -10% 36 51 -28% 25 35 -29%
Al Dhafra Insurance Company P.S.C. 118 104 14% 80 57 40% 42 48 -12% 43 41 3%
Al Fujairah National Insurance Company P.S.C. 58 58 -1% 48 45 7% 21 23 -9% 13 11 14%
Al Khazna Insurance Company P.S.C. 24 35 -33% 17 20 -15% 8 16 -50% (11) 12 -192%
Al-Sagr National Insurance Company (Public Shareholding Company) 123 116 6% 102 99 2% 39 39 0% 20 22 -10%
Al Wathba National Insurance Company PJSC 122 109 12% 102 102 -1% 32 14 130% 42 (0) 13105%
Alliance Insurance PSC - - N/A - - N/A 8 6 40% 12 9 31%
Orient Insurance Company PJSC and its subsidiaries 236 206 15% 107 91 19% 152 143 6% 163 145 13%
Arabian Scandinavian Insurance Company P.L.C. 24 21 14% 13 10 36% 10 13 -26% 16 18 -10%
Dubai Insurance Company (PSC) 44 35 25% 21 21 0% 21 18 16% 26 21 21%
Dubai National Insurance and Reinsurance (P.S.C.) 29 20 48% 15 10 57% 15 12 24% 17 14 22%
Emirates Insurance Company P.S.C 162 135 20% 84 77 9% 68 61 11% 59 64 -8%
Green Crescent Insurance Company PJSC 23 55 -59% 12 52 -76% 9 1 498% 3 (14) 118%
Insurance House P.S.C 25 13 101% 12 6 106% 8 4 108% 6 6 -9%
National General Insurance Co. (P.S.C.) 146 136 8% 105 100 5% 43 42 4% 66 26 150%
Oman Insurance Company P.S.C. 621 569 9% 425 362 18% 186 226 -18% 94 126 -25%
Ras Al Khaimah National Insurance Company P.S.C. 86 67 29% 46 32 44% 35 33 7% 27 23 19%
Sharjah Insurance Company P.S.C. 19 28 -31% 22 36 -40% 6 1 557% 12 7 84%
Union Insurance Company P.S.C. 67 61 10% 43 78 -44% 33 (18) 277% 21 (37) 157%
United Insurance Company P.S.C. 43 38 13% 40 36 10% 5 5 4% 8 (0) 2652%
Total Conventional Companies 2,593 2,358 10% 1,768 1,652 7% 938 884 6% 785 653 20%
Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change
Total Conventional Companies 1,552 1,041 -49% 1,008 760 -33% 611 327 -87% 529 256 -107%
Name of Company
Net Premium Earned Net Incurred Claims Net Underwriting Income Net Profit
Table 4a
Financial Statement Analysis of UAE National Conventional companies
Income Statement - Net Profit
Figures in AED million
14

Net Underwriting Income shows the income of the company, before expenses and investment income are considered. It
demonstrates the skill that a company has in running its core business: insurance underwriting. For Conventional
companies on a consolidated basis, the total Net Underwriting Income for 2013 as of 30 June is AED 938 million, an
increase of 6% from 30 June 2012. Some companies like AKIC, ASIC, OIC and Al Buhaira Insurance Company P.S.C.
(ABNIC) showed substantial reduction in the value of their Net Underwriting Income as of 30 June 2013 when compared
with 30 June 2012.
Net Profit is one of the most important indicators on an Income Statement. On a consolidated basis, Conventional
companies had AED 785 million in Net Profit as of 30 June 2013, compared to AED 653 million as of 30 June 2012, an
increase of 20%. On an individual basis, the results are mixed: some companies showed remarkable improvement in their
Net Profit while others reported significant decreases. It is encouraging to see that only one (1) Conventional company
reported negative Net Profit as of 30 June 2013 when four (4) companies reported negative Net Profit as of 30 June 2012.

Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change Q1&2 2013 Q1&2 2012 %Change
Abu Dhabi National Takaful Company PSC 46 37 27% 12 11 8% 32 25 28% 20 12 69%
Dar Al Takaful PJSC 39 15 169% 31 9 250% 5 3 44% (4) (6) 33%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 64 59 8% 55 37 48% 8 20 -57% (9) (2) -374%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 628 940 -33% 389 569 -32% 75 105 -28% 13 41 -69%
Methaq Takaful Insurance Company PSC 31 36 -13% 31 26 19% (3) 7 -146% 5 (6) 197%
National Takaful Company (Watania) PJSC 12 3 358% 53 - 9 - 489% 65 11 469% (7) (6) -25%
Takaful Emarat - Insurance (PJSC) 18 5 284% 9 3 209% 3 0 1207% (12) (10) -26%
Total Takaful Companies 839 1,093 -23% 474 647 -27% 186 172 8% 6 24 -75%
Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change Q1 2013 Q2 2013 %Change
Total Takaful Companies 471 369 -28% 304 170 -79% 53 133 60% (12) 18 166%
Table 4b
Financial Statement Analysis of UAE National Takaful companies
Income Statement - Net Profit
Figures in AED million
Name of Company
Net Premium Earned Net Incurred Claims Net Underwriting Income Net Profit
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Table 4b presents different Income Statement figures for Takaful companies for both
Q1&2 2013 and Q1&2 2012. Takaful companies showed 23% and 27% reduction in
their Net Premium Earned and Net Incurred Claims as of 30 June 2013.
The main reason behind the lower Net Premium Earned and Net Incurred Claims
figures is that SALAMA reported significant decreases of 33% and 32%, respectively, in
these values.
On a consolidated basis, Net Underwriting Income for Takaful companies increased
from AED 172 million as of 30 June 2012 to AED 186 million as of 30 June 2013. Other
than METHAQ, all Takaful companies reported positive Net Underwriting Income for the
first six months of 2013.
Three (3) Takaful companies reported positive Net Profit while four (4) of them reported
negative Net Profit. On a consolidated basis, Takaful companies reported profit of AED
6 million as of 30 June 2013 compared to Net Profit of AED 24 million as of 30 June
2012. Although, the Net Profit figure is lower than in 2012, this is an improvement from
Q1 2013 when the Net Profit figure was negative.
REINSURANCE RATIOS
Table 5a summarizes reinsurance activities of the Conventional companies and
compares their performance in the first six months of 2013 with that in the same period
in 2012.
It can be observed that Gross premium and Reinsurance Premium increased by 10%
and 6%, respectively, on a consolidated basis for all Conventional companies when
compared between 30 June 2013 and 30 June 2012. Reinsurance Premium as
Percentage of Gross Premium decreased from 54% in 2012 to 52% in 2013. Among all
the Conventional companies, DIC has the highest ratio of Reinsurance Premium as
Percentage of Gross Premium at 72% as of 30 June 2013. The same ratio for NGIC
was only 28% for the same period.
Table 5b summarizes reinsurance activities of the Takaful companies and compares
their performance as of 30 June 2013 with that for the same period in 2012.
For Takaful companies, Gross Premium decreased by 20% while their Reinsurance
Premium decreased by 8% from end of June 2012 to end of June 2013. Reinsurance
Premium as Percentage of Gross Premium increased from 28% in 2012 to 33% in
2013. Among all the Takaful companies, Dubai Islamic Insurance and Reinsurance Co.
(Aman) (PSC) (AMAN) has the highest ratio of Reinsurance Premium as Percentage of
Gross Premium at 69%, as of 30 June 2013. The same ratio for SALAMA was only 19%
for the same period.
16
As of 30 June 2013, Takaful companies in total have lower Re-Takaful levels (33%)
than their Conventional counterparts (52%).


17

Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012
Abu Dhabi National Insurance Company PSC 747 735 2% 355 380 -7% 48% 52%
Al Ain Ahlia Insurance Company - Public Shareholding Company 316 281 13% 176 166 6% 56% 59%
Al Buhaira National Insurance Company P.S.C. 298 303 -1% 180 171 5% 60% 57%
Al Dhafra Insurance Company P.S.C. 191 185 3% 70 73 -3% 37% 39%
Al Fujairah National Insurance Company P.S.C. 88 90 -2% 28 32 -11% 32% 35%
Al Khazna Insurance Company P.S.C. 49 94 -48% 30 35 -14% 62% 37%
Al-Sagr National Insurance Company (Public Shareholding Company) 243 219 11% 98 84 17% 40% 38%
Al Wathba National Insurance Company PJSC 301 246 23% 153 104 48% 51% 42%
Alliance Insurance PSC N/A N/A N/A N/A N/A N/A N/A N/A
Orient Insurance Company PJSC and its subsidiaries 843 765 10% 585 547 7% 69% 71%
Arabian Scandinavian Insurance Company P.L.C. 41 41 0% 16 19 -12% 40% 46%
Dubai Insurance Company (PSC) 187 200 -6% 134 162 -17% 72% 81%
Dubai National Insurance and Reinsurance (P.S.C.) 100 58 73% 59 37 60% 59% 63%
Emirates Insurance Company P.S.C 410 350 17% 208 210 -1% 51% 60%
Green Crescent Insurance Company PJSC 82 66 24% 25 21 22% 31% 31%
Insurance House P.S.C 42 27 56% 14 6 147% 34% 21%
National General Insurance Co. (P.S.C.) 275 253 9% 76 80 -4% 28% 32%
Oman Insurance Company P.S.C. 1,586 1,384 15% 836 766 9% 53% 55%
Ras Al Khaimah National Insurance Company P.S.C. 163 130 25% 69 58 19% 42% 45%
Sharjah Insurance Company P.S.C. 57 62 -7% 28 37 -25% 48% 60%
Union Insurance Company P.S.C. 187 134 39% 115 66 75% 62% 49%
United Insurance Company P.S.C. 74 80 -7% 25 33 -24% 33% 41%
Total Conventional companies 6,282 5,702 10% 3,283 3,085 6% 52% 54%
Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013
Total Conventional companies 3,758 2,524 -49% 1,932 1,351 -43% 51% 54%
Table 5a
Financial Statement Analysis of UAE National Conventional companies
Reinsurance Ratios
Figures in AED million
Name of Company
Gross Premium Reinsurance Premium
Reins Prem as % of
Gross Prem
18


LOSS RATIOS
Table 6a shows Gross, Reinsurance and Net Loss Ratios for Conventional companies.
Gross Loss Ratio is calculated by dividing Gross Incurred Claims by Gross Earned Premium. Reinsurance Loss Ratio is
calculated by dividing Reinsurance Incurred Claims by Reinsurance Earned Premium. Finally, Net Loss Ratio is
calculated by dividing Net Incurred Claims by Net Earned Premium.
For Conventional companies, Net Loss Ratio is higher than Reinsurance Loss Ratio 68% versus 51%, respectively, as
of 30 June 2013. This shows that Conventional companies are not using reinsurance in an optimal way. Loss Ratios or
claims experience of reinsurance companies is much better than that of these insurance companies.


Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012
Abu Dhabi National Takaful Company PSC 125 91 37% 71 53 34% 57% 58%
Dar Al Takaful PJSC 57 39 48% 15 10 59% 27% 25%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 204 199 2% 140 140 0% 69% 70%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 730 1,243 -41% 137 213 -36% 19% 17%
Methaq Takaful Insurance Company PSC 109 33 233% 17 12 38% 15% 37%
National Takaful Company (Watania) PJSC 69 21 224% 38 12 220% 55% 56%
Takaful Emarat - Insurance (PJSC) 45 57 -22% 19 34 -46% 42% 60%
Total Takaful Companies 1,339 1,683 -20% 436 474 -8% 33% 28%
Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013
Total Takaful Companies 722 616 -17% 208 228 9% 29% 37%
Table 5b
Financial Statement Analysis of UAE National Takaful companies
Reinsurance Ratios
Figures in AED million
Name of Company
Gross Premium Reinsurance Premium
Reins Prem as % of
Gross Prem
19

Q1&2 2013 Q1&2 2012 Q1&2 2013 Q1&2 2012 Q1&2 2013 Q1&2 2012
Abu Dhabi National Insurance Company PSC 95% 51% 144% 25% 72% 69%
Al Ain Ahlia Insurance Company - Public Shareholding Company 38% 50% 27% 43% 62% 72%
Al Buhaira National Insurance Company P.S.C. 91% 66% 84% 44% 101% 92%
Al Dhafra Insurance Company P.S.C. N/A N/A N/A N/A 68% 55%
Al Fujairah National Insurance Company P.S.C. 70% 60% 32% 15% 84% 78%
Al Khazna Insurance Company P.S.C. 53% 51% 36% 43% 73% 58%
Al-Sagr National Insurance Company (Public Shareholding Company) 55% 68% 28% 50% 83% 85%
Al Wathba National Insurance Company PJSC 63% 70% 41% 41% 83% 94%
Alliance Insurance PSC N/A N/A N/A N/A N/A N/A
Orient Insurance Company PJSC and its subsidiaries 34% 45% 32% 48% 45% 44%
Arabian Scandinavian Insurance Company P.L.C. 62% 38% 71% 28% 56% 47%
Dubai Insurance Company (PSC) 56% 38% 59% 33% 47% 59%
Dubai National Insurance and Reinsurance (P.S.C.) 36% 36% 35% 31% 52% 48%
Emirates Insurance Company P.S.C 48% 45% 44% 36% 52% 57%
Green Crescent Insurance Company PJSC 65% 93% 75% 92% 54% 94%
Insurance House P.S.C 94% 59% 234% 101% 48% 46%
National General Insurance Co. (P.S.C.) 67% 56% 114% 50% 72% 73%
Oman Insurance Company P.S.C. 54% 46% 50% 40% 68% 64%
Ras Al Khaimah National Insurance Company P.S.C. 37% 40% 20% 36% 53% 48%
Sharjah Insurance Company P.S.C. 112% 86% 112% 43% 113% 130%
Union Insurance Company P.S.C. 39% 70% 26% 25% 64% 127%
United Insurance Company P.S.C. 81% 77% 57% 49% 93% 96%
Total Conventional companies 55% 50% 51% 39% 68% 70%
Table 6a
Financial Statement Analysis of UAE National Conventional companies
Loss Ratios
Name of Company
Reinsurance Loss
Ratio
Net Loss Ratio Gross Loss Ratio
20

Table 6b shows Gross Loss Ratio, Reinsurance Loss Ratio and Net Loss Ratio for Takaful companies.
Experience of Takaful companies, on the whole, is not different from their Conventional counterparts. Reinsurance Loss
Ratios for Takaful companies are considerably lower than their Net Loss Ratios. However, as with all averages, there are
significant variations between the companies.
Table 7a presents figures for General and Administrative Expenses and Net Commission for all of the Conventional
companies included in the study. Net Commission is equal to the difference between commission income from the
reinsurers and commission expenses incurred by the companies.
On a consolidated basis, Conventional companies incurred 19% more in expenses, at AED 617 million as of 30 June
2013, when compared with 30 June 2012. OIC reported the highest expenses of AED 183 million and AED 125 million as
of 30 June 2013 and 30 June 2012, respectively, which is a 47% increase year on year.
Q1&2 2013 Q1&2 2012 Q1&2 2013 Q1&2 2012 Q1&2 2013 Q1&2 2012
Abu Dhabi National Takaful Company PSC 27% 56% 28% 73% 26% 31%
Dar Al Takaful PJSC 76% 55% 65% 42% 78% 60%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 49% 28% 32% 13% 86% 63%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 79% 58% 58% 59% 62% 61%
Methaq Takaful Insurance Company PSC 96% 82% 77% 104% 101% 74%
National Takaful Company (Watania) PJSC -46% -27% 57% 27% -425% -331%
Takaful Emarat - Insurance (PJSC) 49% 76% 47% 87% 51% 63%
Total Takaful Companies 62% 54% 45% 47% 57% 59%
Table 6b
Financial Statement Analysis of UAE National Takaful companies
Loss Ratios
Name of Company
Gross Loss Ratio
Reinsurance Loss
Ratio
Net Loss Ratio
21

Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012 % Change
Abu Dhabi National Insurance Company PSC 49 43 14% 10 12 -19%
Al Ain Ahlia Insurance Company - Public Shareholding Company 27 21 27% 2 12 -83%
Al Buhaira National Insurance Company P.S.C. 17 20 -13% 38 38 -1%
Al Dhafra Insurance Company P.S.C. 17 16 10% 5 2 181%
Al Fujairah National Insurance Company P.S.C. 14 14 3% 12 10 14%
Al Khazna Insurance Company P.S.C. 20 24 -14% 2 1 106%
Al-Sagr National Insurance Company (Public Shareholding Company) 27 25 7% 18 22 -18%
Al Wathba National Insurance Company PJSC 22 20 7% 11 7 58%
Alliance Insurance PSC N/A N/A N/A N/A N/A N/A
Orient Insurance Company PJSC and its subsidiaries 67 57 18% 23 28 -17%
Arabian Scandinavian Insurance Company P.L.C. 7 6 5% (1) 2 -126%
Dubai Insurance Company (PSC) 8 8 2% (1) 2 -165%
Dubai National Insurance and Reinsurance (P.S.C.) 10 9 4% (1) 1 -247%
Emirates Insurance Company P.S.C 37 34 6% (9) 4 -326%
Green Crescent Insurance Company PJSC 15 19 -21% (2) (3) 38%
Insurance House P.S.C 8 6 28% (4) (3) -45%
National General Insurance Co. (P.S.C.) 23 19 22% 2 5 -69%
Oman Insurance Company P.S.C. 183 125 47% (29) 2 -1871%
Ras Al Khaimah National Insurance Company P.S.C. 13 13 8% (5) (2) -167%
Sharjah Insurance Company P.S.C. 7 6 29% 9 9 -6%
Union Insurance Company P.S.C. 36 25 45% 9 (2) 542%
United Insurance Company P.S.C. 10 9 9% 3 4 -33%
Total Conventional Companies 617 518 19% 89 152 -41%
Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013 % Change
Total Conventional Companies 315 302 -4% 55 34 -62%
Table 7a
Financial Statement Analysis of UAE National Conventional Companies
Expenses and Net Commission
Figures in AED million
Name of Company
General and Administrative Expense Net Commission
22

Net Commission earned by Conventional companies reported as of 30 June 2013 is AED 89 million which is 41% less
than the figure reported in 2012. Many big companies reported substantial decrease in their Net Commission while some
companies showed improvement in their Net Commission figures when comparing between Q1&2 2012 and Q1&2 2013.
Table 7b shows figures for General and Administrative Expenses and Net Commission for Takaful companies. Takaful
companies, on a consolidated basis, reported the same General and Administrative Expenses (AED 185 million) when
compared between Q1&2 2012 and Q1&2 2013. Only ADNTC and SALAMA reported a decrease in their expenses, while
all other Takaful companies incurred greater General and Administrative expenses, as of 30 June 2013. Though still a
negative figure, Net Commission earned by Takaful companies is 34% higher in 2013 than for the same period in 2012.
All of the Takaful companies consistently reported negative value for Net Commission.
Q1&2 2013 Q1&2 2012 % Change Q1&2 2013 Q1&2 2012 % Change
Abu Dhabi National Takaful Company PSC * 15 15 -1% N/A N/A N/A
Dar Al Takaful PJSC 10 10 1% (3) (2) -45%
Dubai Islamic Insurance and Reinsurance Co. (Aman) (PSC) 25 24 6% (7) (6) -15%
Islamic Arab Insurance Co. (Salama) and its subsidiaries 97 105 -8% (164) (266) 38%
Methaq Takaful Insurance Company PSC 11 10 13% (3) (2) -24%
National Takaful Company (Watania) PJSC 10 7 37% (0) (0) 9%
Takaful Emarat - Insurance (PJSC) 18 14 21% (6) (2) -290%
Total Takaful Companies 185 185 0% (183) (278) 34%
Q1 2013 Q2 2013 % Change Q1 2013 Q2 2013 % Change
Total Takaful Companies 101 85 -19% (115) (69) -67%
* Commission paid f igure not available separtely
Table 7b
Financial Statement Analysis of UAE National Takaful Companies
Expenses and Net Commission
Figures in AED million
Name of Company
General and Administrative Expense Net Commission
23
CONCLUSION
Net Profit has increased for Conventional companies and decreased for Takaful companies
as of 30 June 2013, as compared to 30 June 2012. Both Net Premium Earned and Net
Claims Incurred are higher for Conventional companies and lower for Takaful companies for
Q1&2 2013 as compared to Q1&2 2012. The industry is also not using reinsurance
optimally, which leads us to conclude that the insurance companies need to reexamine their
reinsurance program and bring it in line with their claims experience.

Both Conventional and Takaful companies reported higher expenses, as of 30 June 2013.
Net Commission earned by Conventional companies is down, while Takaful companies
registered improvement in their Net Commission incurred; although the figure is still
negative, as of 30 June 2013.

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