Insurance House swings to loss on rising medical and motor claims

06/02/2015 05:54 AST

Insurance House swung to a loss last year, which the company blamed on a rise in motor and medical claims and intense industry competition.

The Abu Dhabi-based insurer reported a loss of Dh20.8 million last year against a profit of Dh9.5m a year earlier. But the insurer pledged to "weed out unprofitable businesses" in response.

"Going forward, profits from core insurance activities will be driven by continuous fine- tuning of our risk underwriting policies and capabilities and through enhanced claims management procedures," said the chairman, Mohammed Alqubaisi.

The losses for the year related to higher claims from motor and medical insurance policies and intense competition among insurance companies driving premiums lower, the company said.

Cut-throat competition in the UAE insurance industry has forced some companies to offer premiums that are so low they can no longer be assured of earning a profit from them. The trend has forced some to cut the range of cover offered, while others have had to merge with rivals.

The country had 60 insurance companies active at the end of 2013, including 34 Emirati institutions, according to the Insurance Authority.

Insurance House was listed on the Abu Dhabi Securities Exchange in 2007, with a paid-up capital of Dh12m.

Green Crescent, another Abu Dhabi-based insurer, last year tied up with Kanoo Group and France's Axa Insurance in the latest industry consolidation driven by pricing.

Founded in 2008, Green Crescent was brought to the edge of dissolution in 2012, but opted to keep business going by cutting its capital by more than half to Dh100m.

The National