Sharjah Insurance Company

1. Company Overview & Earnings Context

Sharjah Insurance Company P.S.C. is a UAE public shareholding insurance company established in 1970. The company is regulated by the Central Bank of the UAE and operates through its head office in Sharjah and a branch in Dubai. Its operations include property and liability insurance and insurance of persons and funds accumulation.

H1 2026 was a challenging period for profitability. Insurance revenue increased, but a deterioration in the insurance service result and significantly lower investment income resulted in net profit falling sharply to AED 0.39 million from AED 26.44 million in H1 2025.

2. Financial Performance Snapshot

• Insurance Revenue: AED 22.93 Million (+27.1% YoY)

• Insurance Service Result: AED 12.86 Million Loss, vs. AED 2.21M loss

• Net Investment Income: AED 15.13 Million (-52.0% YoY)

• Net Insurance & Investment Result: AED 2.10 Million, vs. AED 29.14M

• Loss Before Tax: AED 0.65 Million, vs. AED 27.27M profit

• Net Profit: AED 0.39 Million (-98.5% YoY)

• EPS: AED 0.003, vs. AED 0.176

• Total Comprehensive Income: AED 2.15 Million, vs. AED 28.56M

The key theme was therefore revenue growth without earnings growth, as weaker underwriting performance and lower investment returns substantially reduced profitability.

3. Insurance & Investment Performance

Insurance revenue increased to AED 22.93 million from AED 18.03 million, representing approximately 27.1% YoY growth. However, insurance service expenses increased sharply to AED 37.23 million from AED 8.78 million.

As a result, the insurance service result before reinsurance deteriorated to an AED 14.30 million loss, compared with an AED 9.25 million profit in H1 2025. Reinsurance provided some support, generating net income of AED 1.44 million compared with an AED 11.46 million expense in the prior-year period. Even after this improvement, the overall insurance service result was an AED 12.86 million loss, versus a loss of AED 2.21 million.

Investment performance was also significantly weaker. Net investment income declined to AED 15.13 million from AED 31.52 million. The company recorded an AED 2.03 million unrealised loss on FVTPL investments compared with an AED 19.73 million unrealised gain in H1 2025. Dividend income, however, increased to approximately AED 14.39 million from AED 9.72 million.

4. Key Performance Drivers

The biggest pressure on H1 earnings came from insurance service expenses, which increased substantially and pushed the core underwriting result deeper into negative territory. Motor comprehensive represented the company's largest insurance revenue line at approximately AED 15.58 million and recorded a negative segment result during the period.

The second major factor was weaker investment-market performance. Although dividend income improved, the shift from large unrealised investment gains in H1 2025 to unrealised losses in H1 2026 significantly reduced overall investment income.

The investment portfolio itself remained substantial. FVTPL investments increased to AED 222.00 million from AED 210.04 million, while FVOCI investments stood at AED 34.80 million. Approximately AED 170.03 million of the FVTPL portfolio was invested within the UAE and AED 51.97 million in other GCC countries.

Together, weaker insurance profitability and lower investment income caused the company's net insurance and investment result to fall to AED 2.10 million from AED 29.14 million.

5. Balance Sheet, Solvency & Cash Flow

Sharjah Insurance ended June 2026 with:

• Total Assets: AED 374.00 Million

• Total Equity: AED 302.96 Million

• Total Liabilities: AED 71.05 Million

• FVTPL Investments: AED 222.00 Million

• FVOCI Investments: AED 34.80 Million

• Investment Properties: AED 48.25 Million

• Cash & Cash Equivalents: AED 24.56 Million

• Insurance Contract Liabilities: AED 60.83 Million

Equity declined from AED 314.31 million at the end of 2025 to AED 302.96 million, largely reflecting the AED 13.5 million dividend paid during H1.

Cash flow was weak, with AED 10.69 million used in operating activities, compared with AED 0.35 million used in H1 2025. The company generated AED 7.00 million from investing activities and paid AED 13.5 million in dividends, resulting in cash declining to AED 24.56 million.

Importantly, the company's solvency position remained comfortably above regulatory requirements. Basic Own Funds stood at AED 197.02 million against a Solvency Capital Requirement of AED 87.94 million, leaving an SCR solvency surplus of AED 109.08 million. The company stated that it remained compliant with applicable solvency regulations throughout the period.

6. Investor Takeaway

Sharjah Insurance delivered higher insurance revenue in H1 2026, with revenue increasing 27.1% YoY to AED 22.93 million. However, the improvement in the top line was overshadowed by a deterioration in underwriting profitability, with the insurance service loss widening to AED 12.86 million.

Investment performance was the other major drag. Net investment income fell around 52% to AED 15.13 million, primarily as the company moved from substantial unrealised investment gains in H1 2025 to an unrealised loss in H1 2026. Consequently, net profit declined 98.5% YoY to just AED 0.39 million.

A key financial strength is the company's capital and solvency position. Sharjah Insurance maintained an SCR solvency surplus of AED 109.08 million and stated that it remained compliant with solvency regulations. Total equity of AED 302.96 million also represented a substantial portion of its AED 374.00 million asset base.

The independent auditor issued an unmodified review conclusion on the H1 2026 interim financial information. Going into H2 2026, the key areas to monitor are underwriting profitability, insurance service expenses, motor insurance performance, investment returns, operating cash flow and whether higher insurance revenue can translate into stronger earnings.