Ras Alkhaima National Insurance Co

1. Company Overview & Earnings Context

Ras Al Khaimah National Insurance Company P.S.C. (RAK Insurance) is a UAE public joint-stock insurance company and a subsidiary of National Bank of Ras Al Khaimah P.S.C. (RAKBANK). The company is listed on the Abu Dhabi Securities Exchange and is licensed and regulated by the Central Bank of the UAE. Its principal activity covers all classes of insurance business, including life assurance, savings and accumulation of funds, with operations conducted through its head office in Ras Al Khaimah and branches in Ras Al Khaimah, Dubai and Abu Dhabi.

For the nine months ended 30 September 2026, RAK Insurance reported a record profit after tax of AED 49.2 million, compared with AED 31.4 million in 9M 2025, representing growth of approximately 56.5% YoY.

The improvement was primarily driven by substantially stronger underwriting performance. Management highlighted disciplined underwriting as the key driver, with the IFRS 4-based combined ratio improving to 83.5% from 92.2%, while investment performance provided additional support.

2. Financial Performance Snapshot

• Insurance Revenue: AED 421.98 Million (+7.6% YoY)

• Insurance Service Expenses: AED 307.25 Million vs. AED 397.32 Million

• Insurance Service Result Before Reinsurance: AED 114.73 Million vs. AED 5.06 Million Loss

• Net Expense from Reinsurance Contracts Held: AED 60.86 Million vs. AED 34.92 Million Income

• Insurance Service Result: AED 53.87 Million (+80.4% YoY)

• Investment Income: AED 16.76 Million (+5.4% YoY)

• Net Insurance Finance Expense: AED 2.36 Million vs. AED 1.54 Million

• Other Operating Expenses: AED 14.20 Million (+18.4% YoY)

• Profit Before Tax: AED 54.07 Million (+54.3% YoY)

• Net Profit After Tax: AED 49.21 Million (+56.5% YoY)

• Basic & Diluted EPS: AED 0.41 vs. AED 0.26

Underlying insurance profitability improved significantly. Insurance revenue grew 7.6%, but the more important development was the reduction in insurance service expenses, which fell by approximately AED 90 million. Consequently, the insurance service result increased from AED 29.86 million to AED 53.87 million.

The Q3 performance was particularly strong. Q3 2026 profit after tax reached AED 20.59 million, compared with AED 7.35 million in Q3 2025, while the quarterly insurance service result increased to AED 20.31 million from AED 7.37 million.

3. Operating Performance & Major Programs

RAK Insurance manages its insurance activities through two principal segments: Life & Medical and General & Motor. The company conducts its insurance business entirely within the UAE.

Management attributed the improvement in 2026 performance primarily to continued strengthening of underwriting and claims-management processes, alongside disciplined pricing and risk management.

The company's key operating indicators showed a meaningful improvement:

• Combined Ratio: 83.5% vs. 92.2%

• Reinsurance Cession Ratio: 45.5% vs. 45.2%

• Insurance Service Result: AED 53.9 Million vs. AED 29.9 Million

Management calculates the combined and reinsurance cession ratios using IFRS 4 figures, which it considers an appropriate proxy given the absence of industry-wide IFRS 17 KPIs and the company's use of the simplified Premium Allocation Approach (PAA).

The company reported no material non-financial events during the period that adversely affected operations or strategic direction. It continued to focus on disciplined underwriting, effective risk management, regulatory compliance and execution of strategic initiatives.

Management also plans continued investment in technology, digital capabilities and operational processes to enhance efficiency, customer outcomes, regulatory compliance and longer-term growth.

4. Key Performance Drivers

The main driver of the earnings improvement was underwriting profitability. Insurance service expenses declined to AED 307.25 million from AED 397.32 million, despite insurance revenue increasing to AED 421.98 million from AED 392.27 million.

As a result, the insurance service result before reinsurance improved dramatically to AED 114.73 million, compared with a loss of AED 5.06 million in the corresponding period.

Reinsurance partially offset this improvement. Net reinsurance moved from AED 34.92 million of income in 9M 2025 to AED 60.86 million of expense in 9M 2026, as amounts recoverable from reinsurers for incurred claims declined substantially.

Even after this movement, the final insurance service result increased 80.4% to AED 53.87 million.

Investment income was another positive contributor, rising to AED 16.76 million from AED 15.90 million. Interest income reached approximately AED 18.03 million, while dividend income increased to AED 0.79 million. This was partly offset by a AED 1.79 million realised loss on disposal of FVTOCI investments.

Other operating expenses increased to AED 14.20 million from AED 12.00 million, while the prior-year period also benefited from AED 2.81 million of other underwriting income that did not recur in 2026.

Despite these offsets, stronger core underwriting drove profit before tax up 54.3% to AED 54.07 million and net profit up 56.5% to AED 49.21 million.

5. Balance Sheet, Backlog & Cash Flow

• Total Assets: AED 863.90 Million (+1.4% vs. Dec. 2025)

• Total Equity: AED 258.47 Million (+14.0%)

• Share Capital: AED 121.28 Million

• Retained Earnings: AED 90.97 Million

• Total Liabilities: AED 605.42 Million (-3.2%)

• Financial Assets: AED 367.73 Million (+10.7%)

• Cash & Cash Equivalents: AED 38.71 Million vs. AED 11.45 Million

• Bank Deposits: AED 156.50 Million

• Insurance Contract Liabilities: AED 543.42 Million

• Reinsurance Contract Assets: AED 263.72 Million

• Net Operating Cash Flow: AED 61.05 Million vs. AED 18.88 Million

• Net Investing Cash Outflow: AED 33.79 Million

• Net Financing Cash Flow: Nil

The balance sheet strengthened during the period. Equity increased approximately AED 31.8 million to AED 258.5 million, supported by the AED 49.2 million net profit, although this was partly offset by AED 17.4 million of negative other comprehensive income arising principally from fair-value movements in FVTOCI investments.

The investment portfolio increased to AED 367.73 million from AED 332.22 million. The portfolio included AED 324.17 million of FVTOCI debt securities, AED 30.66 million of FVTOCI equity investments and AED 12.90 million of debt investments carried at amortised cost.

Cash generation strengthened considerably. Net cash generated from operating activities increased to AED 61.05 million, more than three times the AED 18.88 million generated in the comparable period.

Cash and cash equivalents consequently increased from AED 11.45 million at the beginning of the year to AED 38.71 million at September 2026, despite AED 33.79 million of net investing outflows.

A conventional backlog/order-book metric is not applicable to an insurance company and is therefore not disclosed.

6. Investor Takeaway

RAK Insurance's 9M 2026 results represent a significant improvement in underlying insurance profitability, rather than earnings growth driven solely by investment gains.

Net profit increased 56.5% to a record AED 49.2 million, while EPS rose to AED 0.41 from AED 0.26. The strongest indicator was the improvement in the insurance service result to AED 53.9 million from AED 29.9 million, supported by disciplined underwriting and a combined ratio that improved to 83.5% from 92.2%.

The balance sheet also strengthened, with equity increasing 14% to AED 258.5 million and operating cash generation rising to AED 61.0 million. Financial assets expanded to AED 367.7 million, providing a substantial investment base alongside the core insurance operation.

The main offset was reinsurance performance: net reinsurance shifted from AED 34.9 million of income to AED 60.9 million of expense. The investment portfolio also recorded substantial negative FVTOCI fair-value movements through OCI, resulting in other comprehensive losses of AED 17.4 million. These movements reduced total comprehensive income to AED 31.8 million despite the strong AED 49.2 million reported net profit.

Going forward, the key areas to monitor are combined-ratio sustainability, claims performance, reinsurance recoveries and cession economics, investment-market movements, operating-expense growth and continued cash generation. Management intends to pursue profitable and sustainable growth through disciplined underwriting and prudent risk management while continuing investment in technology, digital capabilities and operational processes.

Management stated that it had not identified geopolitical, economic or financial-market developments expected to have a material adverse impact on the company's operations, financial position, solvency or liquidity based on its current assessment.