Sharjah Insurance 2025: A Record Profit Made Mostly in the Stock Market

Sharjah Insurance Company's audited accounts for 2025 show a net profit of AED 59.8 million, up from AED 5.0 million in 2024. Earnings per share rose from 3.34 fils to 39.87 fils, and shareholders' equity closed the year at AED 314.3 million. On the face of it, a breakthrough year.

Read the notes and the picture changes. The insurance business lost money again. Nearly all of the profit came from the investment portfolio, and most of that came from share prices rising rather than from cash received. For anyone judging how repeatable these results are, that distinction is the whole story.

The insurance business: better, but still in the red

Premium income grew well. Insurance revenue rose 23% to AED 39.6 million. Gross written premiums, the total value of policies sold, rose 33% to AED 44.1 million, a figure the company discloses for the UAE Central Bank rather than under IFRS 17. The company is writing more business.

The bigger swing was in claims. 2024 was the year of the April floods in the UAE, and its insurance service result was a loss of AED 8.2 million after reinsurance. In 2025 the same line was a loss of AED 1.4 million. Net insurance contract liabilities, which include what the company still owes on claims, fell from AED 88.7 million to AED 51.7 million over the year.

So the insurance operation improved by almost AED 7 million and still did not make money. Reinsurance, the cover the company buys from larger insurers to share its risk, cost AED 42.2 million net in 2025, against a net recovery of AED 47.7 million in 2024, when reinsurers bore a large share of that year's claims.

Motor is the weak spot

Comprehensive motor cover produced AED 26.0 million of insurance revenue, about two-thirds of the total, and the segment note shows it lost AED 4.5 million. Every other line together, including fire, engineering, marine and third-party motor, made about AED 2.7 million. The company's largest product is the one dragging the result down.

There is also a quieter change in risk. The notes state that the company now retains up to AED 180,000 per vehicle or accident on any motor policy, up from AED 60,000 in 2024. Keeping more of each claim saves reinsurance cost, but it also means a bad run of motor claims will hit profit harder than before.

The investment engine: where the profit came from

Net investment income was AED 65.2 million, more than the entire profit before tax of AED 60.5 million. The insurance loss, running costs and finance costs were all paid for by the portfolio.

• Unrealised gains on shares held at fair value through profit or loss: AED 51.9 million. These shares went up in value but were not sold. This one item is about 86% of profit before tax.
• Cash dividends: AED 11.4 million, a steadier source.
• Gains on shares actually sold: AED 3.0 million.
• Investment property: a fair-value loss of AED 5.9 million, partly offset by net rental income of AED 3.4 million.

The portfolio is large and concentrated. Listed and unlisted securities total about AED 247 million, roughly 65% of total assets of AED 379 million. Of the AED 210 million held at fair value through profit or loss, AED 154 million is in UAE companies. The company also holds AED 94.5 million of assets denominated in Kuwaiti dinar.

Cash tells a more cautious story

Despite the headline profit, operating activities used AED 1.7 million of cash in 2025, against AED 8.4 million generated in 2024. That is what a paper gain looks like in a cash flow statement: it adds to profit and adds nothing to the bank. Cash and cash equivalents still rose to AED 41.8 million, helped by investment activity. The company paid a cash dividend for 2024 of AED 7.5 million, 5 fils per share, approved at the general assembly on 28 April 2025.

Capital remains comfortable

The solvency position is strong. Basic own funds of AED 221.5 million cover the Central Bank's solvency capital requirement of AED 80.1 million about 2.8 times, up from about 2.3 times a year earlier. The minimum capital requirement is AED 100 million against share capital of AED 150 million.

Tax: an effective rate of about 1%

Total tax expense was AED 0.7 million on profit before tax of AED 60.5 million. That is current tax of AED 1.2 million less a deferred tax credit of AED 0.5 million.

The tax note's reconciliation shows what brought the bill down from the AED 5.4 million a flat 9% would produce. The two largest deductions are a tax effect of AED 3.8 million for unrealised fair-value gains not taxed in the year, and AED 0.75 million for dividends from UAE companies, which are exempt.

The note does not name the basis for leaving the unrealised gains out. Under UAE Corporate Tax, the usual route is the realisation basis election in Article 20(3) of the Corporate Tax Law, which taxes those gains when the shares are sold rather than as they are revalued. If that is the position, the tax has been deferred rather than removed, and it will arrive when the portfolio is sold.

What to watch in 2026

1. Whether comprehensive motor can be priced back to profit, now that the company carries more of each claim itself.
2. How the UAE and Kuwait share markets perform, given how much of the profit depends on them.
3. The events after the reporting date. The accounts note that regional geopolitical tensions after year-end have increased uncertainty, and treat them as non-adjusting events.

This article is BIFI Partners' reading of the published audited financial statements for the year ended 31 December 2025. It is not investment advice, and figures are rounded from the reported amounts.

Reading accounts like these for your own business

The questions asked here apply to any business with an investment portfolio or property on its balance sheet. How much of the profit is cash? How much depends on market prices? How is each gain treated for Corporate Tax, and when will the tax arrive? BIFI Partners reviews financial statements for owners, boards and lenders, models the Corporate Tax treatment of investment gains, dividends and property, and checks that deferred tax is correctly reflected in the accounts.