Alliance Insurance

1. Company Overview & Earnings Context

Alliance Insurance P.S.C. is a UAE insurance company providing both short-term and long-term insurance contracts. Its activities cover property, motor, aviation and marine insurance, as well as individual life, group life, personal accident, medical and investment-linked products.

Alliance delivered a strong improvement in H1 2026 profitability, with insurance revenue increasing to AED 188.58 million and net profit nearly doubling to AED 20.19 million, compared with AED 10.83 million in H1 2025.

2. Financial Performance Snapshot

• Insurance Revenue: AED 188.58 Million (+23.8% YoY)

• Insurance Service Result Before Reinsurance: AED 65.53 Million, vs. AED 66.84 million

• Insurance Service Result: AED 2.85 Million, vs. AED 8.47 million loss

• Total Investment Income: AED 27.88 Million (-0.8% YoY)

• Profit Before Tax: AED 22.06 Million (+87.0% YoY)

• Net Profit: AED 20.19 Million (+86.4% YoY)

• EPS: 20.19 fils, vs. 10.83 fils in H1 2025

The standout improvement was the return of the insurance service result to positive territory, alongside substantial growth in overall net profit.

3. Insurance & Reinsurance Performance

Insurance revenue increased from AED 152.39 million to AED 188.58 million, representing growth of approximately 23.8% YoY. Insurance service expenses increased to AED 123.06 million from AED 85.55 million.

As a result, the insurance service result before reinsurance stood at AED 65.53 million, slightly below AED 66.84 million in H1 2025.

Reinsurance performance improved meaningfully. Net expenses from reinsurance contracts held declined to AED 62.68 million from AED 75.30 million, as amounts recoverable from reinsurers increased to AED 51.86 million from AED 28.72 million.

This improvement pushed the overall insurance service result to a positive AED 2.85 million, compared with an AED 8.47 million loss in H1 2025.

4. Key Performance Drivers

The biggest driver of the earnings improvement was the turnaround in insurance service profitability. Although the pre-reinsurance result was broadly stable, improved recoveries and a lower net reinsurance expense helped move the final insurance service result from a loss into profit.

Investment income remained an important earnings contributor at AED 27.88 million, broadly stable compared with AED 28.11 million in H1 2025. Income from investment properties increased to AED 8.08 million from AED 6.88 million, partly offsetting lower income from financial investments.

Finance-related insurance results remained negative at AED 8.43 million, while other operating expenses increased to AED 2.17 million from AED 1.19 million. Despite these pressures, profit before tax increased 87% to AED 22.06 million, reflecting the much stronger overall insurance result.

5. Balance Sheet, Investments & Cash Flow

Alliance ended June 2026 with:

• Total Assets: AED 1.31 Billion

• Total Equity: AED 560.74 Million

• Total Liabilities: AED 747.33 Million

• Fixed Deposits: AED 418.51 Million

• Cash & Cash Equivalents: AED 33.17 Million

• Reinsurance Contract Assets: AED 220.00 Million

• Insurance Contract Liabilities: AED 724.75 Million

Total assets increased slightly from AED 1.30 billion at the end of 2025, while total equity declined from AED 573.66 million to AED 560.74 million. The reduction partly reflects the AED 30 million dividend paid to shareholders during H1 2026.

Cash generation remained weak. Alliance used AED 26.42 million of cash in operating activities, compared with AED 21.45 million used in H1 2025. This was offset by AED 51.78 million generated from investing activities, while financing activities used AED 30 million for dividends. Cash and cash equivalents ended the period at AED 33.17 million.

6. Investor Takeaway

Alliance Insurance delivered a strong H1 2026 earnings recovery, with insurance revenue increasing 23.8% to AED 188.58 million and net profit rising 86.4% to AED 20.19 million. EPS nearly doubled to 20.19 fils, while the insurance service result returned to positive territory.

The improvement in the reinsurance result was particularly important. Higher amounts recoverable from reinsurers helped reduce net reinsurance expenses, enabling the company to report an AED 2.85 million insurance service profit versus an AED 8.47 million loss a year earlier.

The main area to monitor is cash generation, as operating activities used AED 26.42 million during H1 despite the strong reported profit. Total equity also declined modestly, although the company paid AED 30 million in dividends during the period.

The independent auditor issued an unmodified review conclusion, stating that nothing had come to its attention indicating that the H1 2026 financial information was not prepared, in all material respects, in accordance with IAS 34. Key areas to monitor in H2 2026 are insurance revenue growth, reinsurance performance, underwriting profitability, investment income, operating cash flow and the company's cash position.