Al Buhaira National Insurance Company

1. Company Overview & Earnings Context

Al Buhaira National Insurance Company (ABNIC) is an ADX-listed UAE insurance company headquartered in Sharjah. The company provides insurance across property, engineering, motor, marine and aviation, miscellaneous accidents, group life and medical, with branches across the UAE.

ABNIC delivered a strong improvement in H1 2026 profitability, with insurance revenue increasing to AED 873.36 million and net profit rising to AED 77.24 million, compared with AED 21.19 million in H1 2025.

2. Financial Performance Snapshot

• Insurance Revenue: AED 873.36 Million (+6.3% YoY)

• Insurance Service Result Before Reinsurance: AED 226.04 Million, vs. AED 31.66 million

• Insurance Service Result: AED 58.02 Million, vs. AED 10.21 million

• Investment & Other Income: AED 36.09 Million (+45.0% YoY)

• Net Insurance & Investment Result: AED 90.87 Million, vs. AED 31.70 million

• Profit Before Tax: AED 84.52 Million (+324.7% YoY)

• Net Profit: AED 77.24 Million (+264.4% YoY)

• EPS: 30.89 Fils, vs. 8.48 fils in H1 2025

The standout feature was the sharp improvement in underwriting profitability, which helped net profit more than triple despite a significantly weaker reinsurance result.

3. Insurance & Operating Performance

Insurance revenue increased from AED 821.93 million to AED 873.36 million, while insurance service expenses declined significantly to AED 647.31 million from AED 790.27 million.

This drove the insurance service result before reinsurance to AED 226.04 million, compared with just AED 31.66 million in H1 2025. However, net expense from reinsurance contracts increased sharply to AED 168.02 million from AED 21.45 million.

Despite the higher reinsurance expense, the overall insurance service result increased substantially to AED 58.02 million from AED 10.21 million. The underwriting segment contributed AED 54.79 million to the Group's H1 result, while investments contributed AED 36.09 million.

4. Key Performance Drivers

The biggest driver of ABNIC's H1 earnings growth was the significant improvement in core insurance performance. Insurance service expenses declined by approximately 18.1% despite insurance revenue growing 6.3%, resulting in a much stronger insurance service result before reinsurance.

Investment and other income also increased to AED 36.09 million from AED 24.89 million, providing additional support to earnings. Meanwhile, general and administrative expenses declined to AED 3.16 million from AED 4.05 million, and finance costs fell to AED 3.08 million from AED 7.59 million.

Together, stronger underwriting results, higher investment income and lower finance and administrative costs helped lift profit before tax more than fourfold to AED 84.52 million.

5. Balance Sheet, Cash Flow & Financial Position

ABNIC ended June 2026 with:

• Total Assets: AED 1.55 Billion

• Total Equity: AED 564.20 Million

• Total Liabilities: AED 985.67 Million

• Investment Properties: AED 794.54 Million

• Investments in Securities: AED 74.81 Million

• Deposits: AED 415.19 Million

• Cash & Cash Equivalents: AED 57.98 Million

• Bank Borrowings: AED 102.73 Million

Equity improved considerably from AED 482.70 million at the end of 2025 to AED 564.20 million, supported by H1 profits and positive movements in investment fair values. Retained earnings moved from an accumulated loss of AED 6.51 million to positive retained earnings of AED 65.92 million.

Cash flow was weaker despite the strong earnings. ABNIC used AED 21.63 million of cash in operating activities, compared with AED 93.89 million generated in H1 2025. Cash and cash equivalents consequently declined to AED 57.98 million from AED 107.57 million at the beginning of the year.

6. Solvency Position & Investor Takeaway

ABNIC delivered a significant H1 2026 earnings improvement, with insurance revenue up 6.3%, the insurance service result increasing to AED 58.02 million and net profit rising 264.4% to AED 77.24 million. The improvement was supported by stronger underlying underwriting performance, higher investment income and lower finance costs.

However, the Group reported a Solvency Capital Requirement deficit of AED 211.78 million under Central Bank of the UAE requirements. Management stated that the breach does not affect operational liquidity or the Group's ability to meet its financial obligations in the normal course of business, but it requires enhanced regulatory oversight and measures to restore the solvency position.

The Central Bank has provided a no-objection letter for ABNIC's Solvency Recovery Plan, and management continues to implement the action plan. The directors concluded that there is no material uncertainty casting significant doubt on the Group's ability to continue as a going concern, supported by its profitability, AED 564.2 million of net assets and projected cash flows.

The auditor nevertheless issued a qualified conclusion because it was unable to complete its review of matters related to certain irregular historical transactions. A forensic investigation has been completed, but the final report was not provided to the auditor, while certain matters identified in that report remain under further investigation by external legal consultants.

Key areas to monitor in H2 2026 are insurance profitability, reinsurance costs, operating cash flow, the AED 211.78 million solvency deficit, implementation of the Solvency Recovery Plan and developments arising from the independent fact-finding review.