The performance dispersion among key names suggests that the markets are focusing on individual stock picking rather than broader-based participation across all names. For instance, the difference between the top and worst performers is wide, ranging from -15.83% to +14.87%. For some UAE-listed insurers, lower volumes and near-zero liquidity have also led to flat performance for a few small-cap names.
B) Takaful Segments Repricing Overall Risk Structure
Takaful insurers are known to have high-cost structures and a lower scale than their major diversified peers. For this reason, major Takaful segment operators seem to be lagging their conventional peers owing to the major challenge of achieving sustainable profitability. Case in point: Sukoon Takful ( -4.67 %) v/s Sukoon ( + 5%)
C) Return performance seems to be company-specific and not sub-sector-specific
The overall returns profile suggests that markets are actively differentiating risk, with weaker balance-sheet names bearing the brunt of investor sentiment. This can also be viewed from the overall perspective of an expected higher claims ratio and investment losses. For a company like ADNIC (a solid balance sheet and overall covered risk profile), its negative performance can be attributed to the impact of massive investments on its earnings. As of its latest earnings (9M’2025), it had investment income of AED 223 million, versus total profits of AED 395 million (representing nearly 60% of earnings influenced by investments). For other worst performers, including Al Wahtba and Watania, the overall margins and equity ratios are raising concerns among investors.
In case of war escalation and long-duration conflict, key trends that could emerge include
A) Hardening of Insurance Pricing – Smaller Players May Find It Difficult to Survive
With increasing war risk premiums, the overall cost of reinsuring is likely to surge globally. While this will translate into higher pass-through to customers, smaller players could suffer significantly because of their limited ability to pass on higher costs. Segment-wise, small insurers with exposures to marine/cargo and the industrial and energy sectors could be hard hit. In such a scenario, there could be industry consolidation, with larger players seeking to gain a foothold and market share from weaker, smaller players. Given that the UAE already has multiple listed insurers, this scenario is more likely in a prolonged conflict.
B) Likelihood of New Premium Category – Mandatory Political/Terrorism Violence & Property Coverage
The ongoing missile and drone attacks by Iran on its Gulf neighbours could imply the central bank mandate of a mandatory category for insuring against these kinds of threats. Should the conflict further widen, this could be of advantage to multi-line insurers such as ADNIC, Sukoon and Orient. While the contract terms and coverage areas could initially be limited and standard, they could become more comprehensive and tailored to specific requirements.
